Exam PMP topic 1 question 1044 discussion

Actual exam question from PMI's PMP

Question #: 1044
Topic #: 1

A bank is considering building another branch in one of three neighboring cities. The project manager has been tasked with demonstrating the benefits of building a new branch, renting an existing building, or not expanding at all.

How should the project manager proceed?

A. Perform a gap analysis on renting in each of the locations.
B. Calculate the costs for each option in each location and compare the net present value (NPV) for each.
C. Perform a Kano analysis on building a new branch versus renting in each of the locations.
D. Calculate the payback period (PBP) for building a new branch in each location versus renting an existing building.

Show Suggested Answer

Suggested Answer: B 🗳️

by Abdelmonm at Jan. 5, 2024, 6:28 a.m.

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victory108

7 months, 1 week ago

Selected Answer: B

B. Calculate the costs for each option in each location and compare the net present value (NPV) for each

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Abdelmonm

1 year, 4 months ago

Selected Answer: B

B. Calculate the costs for each option in each location and compare the net present value (NPV) for each. When faced with the decision to build a new branch, rent an existing building, or not expand at all, a thorough financial analysis is essential. Calculating the costs for each option in each location and comparing the net present value (NPV) helps in evaluating the financial feasibility and benefits of each alternative. NPV takes into account the time value of money, providing a comprehensive view of the potential returns over time. Performing a cost-benefit analysis, considering factors like initial investment, operating costs, and revenue projections, allows the project manager to present a quantitative assessment of the options to stakeholders. This approach enables an informed decision based on financial considerations and aligns with best practices in project evaluation and selection.

upvoted 1 times

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UppersquareCapital

1 year, 4 months ago

Selected Answer: B

Calculating the costs for each option in each location and comparing the net present value (NPV) helps in evaluating the financial viability of each choice. NPV takes into account the time value of money and helps in determining which option provides the greatest financial benefit over time. This approach aligns with a thorough financial analysis, which is crucial for decision-making in projects with multiple options.

upvoted 2 times

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