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Exam PgMP topic 1 question 132 discussion

Actual exam question from PMI's PgMP
Question #: 132
Topic #: 1
[All PgMP Questions]

An organization is considering a new program. The business analyst believes that the benefits to the organization would equate to $1,550,000 in five years. If the rate of return for this program is six percent what is the maximum amount the organization should invest in this program?

  • A. $1,158,250
  • B. It depends on the internal decision making process.
  • C. $2,074,249
  • D. $1,550,000
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Suggested Answer: A 🗳️
by Lch at April 13, 2020, 11:21 p.m.

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UHS
10 months, 1 week ago
FV = 1550000 PV? PV=FV/((1+1.06)^5) = 1550000/1.338 = 1,158,250
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SyedCert
1 year, 10 months ago
I think it's C Future Value (FV) = Present Value /(1/(1+r)^P) FV = =1550000/(1/(1+0.06)^5) FV = 2074249.645
upvoted 1 times
psvexam
1 year, 9 months ago
Future value is already given which is 1550000. So exchange values in your formula. Then you will get the lower current value, instead of 2074249.
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Lch
3 years, 7 months ago
Formula please
upvoted 2 times
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