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About the Initiating Process grouP
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This process group includes processes that pertain to starting a new project and preparing and getting approvals for the project charter.

 

The project charter is a document that contains a high-level description of the project scope, constraints, approximate timelines, key stakeholders, budget estimates, etc.

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Questions for the Initiating Process Group
 
Question 1

  • Which of the following is not true about project initiation?   

    1. Your project expenses are the highest during initiation.

    2. Your stakeholders have the most input and influence during this phase.

    3. Of all the phases, initiation has the most uncertainty.

    4. You have an unclear idea of the details and how the project will progress

 

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Question 2

  • A project to develop a highway in Uganda is expected to cost $5,000,000. The highway will take 2 years to develop and complete and is expected to return $200,000 per month in road tolls. What is the payback period including the development time?                   

    1. 24 months

    2. 25 months

    3. 49 months

    4. 50 months

 

  Question 3

  • Which of the following is an output of the Develop Project Charter process?  

    1. Issue log

    2. Assumption log

    3. Change log

    4. None of the above


Question 4

  • Which of these is not correct about a project charter?    

    1. A project charter is developed by the project manager with help from the project team and stakeholders.

    2. A project charter authorizes the project manager to use the corporate resources.

    3. A project charter lists the project approvers and project manager.

    4. A project charter contains an exhaustive list of all possible risks, constraints and assumptions.

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 Question 5

  • Stakeholders should ideally be identified during which of the following project stages? 

    1. They should be identified throughout the project

    2. During project planning

    3. During project execution

    4. During project initiation

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 Question 6

  • You are asked to select one of the following projects based on the internal rate of return (IRR) but without any consideration for the wait period. Note that the initial capital investment is considered as the sunk cost. Which project would you select?    

    1. Project A: The initial investment is $200,000 and you will get $20,000 per month after 6 months.

    2. Project B: The initial investment is $300,000 and you will immediately start getting $30,000 per month

    3. Project C: The initial investment is $400,000 and you will get $40,000 per month after 12 months

    4. Project D: The initial investment is $500,000 and you will get $25,000 per month without any wait time.

 

 

Answers  for the Initiating Process Group
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Answer 1
The correct answer is  Choice 1.
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During initiation, you are involved in developing the project charter with stakeholders. The expenses are low. Most of the expenses will happen during execution

 

Answer 2

The correct answer is Choice 3.

Explanation   The payback period is the time to build the highway (which is 24 months) + the time to recover the capital expense (which is $5,000,000/$200,000 or 25 months).  The total time = 24 + 25 = 49 months

 

 Answer 3

 The correct answer is Choice 2.

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The assumption log is created in the Develop Project Charter process with various high- level assumptions on strategy and operational situations.

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Later, when the project is in- progress, details (about activities, resource availabilities, etc.) are added to the assumption log. See Page 81 of the PMBOK®.

 

 Answer 4

 The correct answer is Choice 4.

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The project charter has an initial list of risks, constraints and assumptions. These are later updated in other project documents such as risk register, and assumption log.

 

 Answer 5

The correct answer is Choice 4.

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Again, notice words such as never, almost, always, ideally in the question. Identification of stakeholders and changes to the stakeholder engagement assessment matrix can happen throughout the project.

 

But ideally, identifying the stakeholders should happen during project initiation. Then during planning, the stakeholder needs can be captured in the requirements documents. This helps prevent changes to the project during execution phase when such changes are difficult and expensive to implement.

 

If new stakeholders are identified and added during execution stages, the stakeholders will provide their requirements which will lead to new change requests.

 

Answer 6

The correct answer is Choice 1.

 

You need to compute the IRR (internal rate of return).

  • For Project A: rate of return is 10% ($20,000/$200,000)

  • For Project B: rate of return is also 10% ($30,000/$300,000)

  • For Project C: rate of return is again 10% ($40,000/$400,000)

  • For Project D: rate of return is 5% ($25,000/$500,000)

 

The higher the IRR, the better. The IRR is the same for Projects A, B and C. The next factor to consider would be the investment, which is considered as a sunk cost. This sunk cost is least for Project A, which is therefore the correct answer.

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