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Exam PMI-PBA topic 1 question 6 discussion

Actual exam question from PMI's PMI-PBA
Question #: 6
Topic #: 1
[All PMI-PBA Questions]

A business analyst is conducting a cost-benefit analysis of potential solution options. The stakeholders have indicated that the estimated growth rate is very important to them.
Which technique will allow the business analyst to determine this information?

  • A. Net present value (NPV)
  • B. Payback period
  • C. Return on investment (ROI)
  • D. Internal rate of return
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Suggested Answer: D 🗳️
by Jillian154 at Dec. 6, 2022, 8:14 a.m.

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Cath090123
7 months, 1 week ago
Internal Rate of Return. The projected annual yield of an investment, incorporating both initial and ongoing costs into an estimated percentage growth rate a given project is expected to have.
upvoted 1 times
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BA_all_round
1 year, 2 months ago
Selected Answer: D
p.2.5.6.3 of BA for Proctitioners, PMI
upvoted 3 times
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Proctored_Expert
1 year, 4 months ago
Selected Answer: D
The technique that will allow the business analyst to determine the estimated growth rate is the internal rate of return (IRR). The IRR is a measure of the rate at which the net present value (NPV) of an investment becomes zero. It is used to compare the profitability of different investments by taking into account the time value of money. The IRR can be used to determine the estimated growth rate of an investment because it takes into account the expected cash flows over the life of the investment, as well as the initial investment.
upvoted 3 times
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Jillian154
1 year, 4 months ago
Selected Answer: D
"IRR is the estimated growth rate percentage that a given project is expected to attain.'' - page 55, 2.5.6.3, PBA book -
upvoted 2 times
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Jillian154
1 year, 4 months ago
"IRR is the estimated growth rate percentage that a given project is expected to attain.'' - page 55, 2.5.6.3, PBA book - I think this correct answer is IRR
upvoted 4 times
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