[Music] hi everyone welcome to your pmp practice uh for your morning you know check this every morning do some practice exams a great way to prepare for your pmp exam see if you've got all of the questions going and you can answer them on the fly that's what we're going to be doing here we're going to be looking at these questions for the first time and we'll see how many i can get right hopefully it's uh it's enough but we'll work them out together and that's part of the fun let's delve into it five questions for your morning we've got the first one let's have a look what do we got here benefit cost ratio okay we've looked at this before bcr is the ratio of the benefits of a project relative to its costs we want the highest benefits to the lowest costs basically you're working a project with a total cost of 200 000 okay so a cost is 200 that project results in a benefit of 190 what is the benefit to cost ratio so it's less than one because our benefit is less this to me looks like like uh what five percent less so 10 of 200 000 is 20 so we've got 200 minus 10 is 190 so that's about five percent to me so what do we got would we say zero point nine five so five percent less than one i'm going to go with question with answer b okay it's answer b fantastic benefit to cost ratio is the benefit divided by the cost a similar way i mean i just worked it out in a funny way you know by minusing instead of doing the proper calculation which makes sense still so 190 000 divided by 200 000 equals 0.95 and that's what we wanted fantastic how did you guys go question two let's have a look a recent news article okay this is a gonna be a soft skills one i can tell it's not no no maths here uh it's spreading a rumor about the supplier you're working with okay so they're reportedly in the middle of a hostile takeover bid from another larger company you need to ensure that your project is able to continue and what should you do okay this is going to be interesting ignore the news article they don't know the supplier like you do probably not best like so with project management questions usually direct and collaborative approach is the best sort of so let's figure out something that meets that criteria set a meeting and talk to the executives in charge of the hostile bidder maybe not our area but i mean that is direct so maybe talk to the vendor that we're working with and find out the facts that's probably the best so far stop working with the vendor immediately i mean what's going to happen there that's going to end in tears for everyone and get another vendor to do the work i mean that's not really direct and it's not collaborative so i'm not going to go with that one i'm going to go with number c let us see okay fantastic the best approach okay oh this is great as well so you know this is definitely called out in the pmbok guide direct and collaborative is the way that you should work through any problems and you're always going to have so many problems on a project it's just the nature of that work and partially what makes it so interesting and changing all the time raise the issue with the vendor directly and work out an approach to control the risk yeah exactly so talk through the risks how can you control them together and maybe you can actually work together in a better capacity so that sounds great how did you guys go let's look at number three okay we've got you're asked to select a new project okay this looks like a benefits thing project x takes three years to complete with a net present value of 101 okay net present value very good we know what we're working with and three years now this could be a trick question here guys as well with the years but we'll have a look in a second 101 000 net present value project y takes two years and a net present value of 95 000. okay so with these questions don't you if it's if it words are like this don't get bogged down in the uh in the calculation you actually don't have to calculate the net present value here you have to select the highest net present value very simple and so for us it's project x with 101 000 so that's what we're going to look for letter b i'm probably going to choose the trick is the years are already taken into consideration with the net present value calculation so all of that is already taken into consideration it's a trick so don't fall for it okay answer b fantastic the net present value calculation and here it says as well it takes into consideration uh the years already making project x the right choice with higher number and it gives us the net present value calculation there which is our cash flows we don't have all of that information to hand so really we just want to choose the highest one fantastic how'd you go let's look at number three four that's a four we're nearly there four out of five opportunity cost okay what is the opportunity cost of selecting project x over project y uh when project so this is all we do is is the opportunity cost is the cost of the one that we don't choose so or the benefit of the one that we don't choose so let's have a look project we're choosing project x so that's that's 124 so that's not it project y is the one we're not choosing 179 let's go with answer b for this great news fantastic guys well done how did you go the opportunity cost is the value of the project not selected in this case project x was chosen making the cost of project y the opportunity cost and that's our 179 thousand dollars let's look at our last question i hope you go you guys are going well this is great practice a great thing to do before your pmp exam and get right into it we have got the benefit cost ratio again commonly used to identify the most efficient projects but what does a benefit cost ratio of 1.45 imply okay that's a good question it means that the benefits are 1.445 times the costs okay so cost is 1.45 times the profit no cost and cost is 1.45 times the revenue i don't want to go that either because it's the benefit is more than the cost here so profit is profit is 1.45 times the cost that this could be a trick here because profit guys if you do any accounting at all and this is very important profit is not the same as revenue so revenue is the actual raw dollars that come in the sales like the actual sales amount profit happens after all of your costs and taxes and everything so for me it's the benefit the benefit is not the profit profit comes after all of that is calculated benefit is the raw sales and that's our revenue so revenue is 1.45 times the cost i'm going to go with answer d for this one let's hope we're right see how we go fantastic news answer d benefit to cost ratio is the ratio of benefits of a project relative to its cost revenue is money coming in before costs taxes or other expenses so that's the closest to benefits that we're going to see in this scenario here therefore bcr implies a 1.45 times revenue the cost how did you guys go i hope you enjoyed this pmp practice good luck on your exam you can do it keep practicing i believe in you and i know if you keep looking at these questions and keep studying hard you absolutely will pass the pmp exam i'll see you in the next video good luck and bye for now