Quiz 2 - With Solution
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Solution to Quiz # 2 1 - You manage a hotel resort located on the South Beach on Grand Bay in Mauritius. You are shifting the focus of your resort from a traditional fun-in-the-sun destination to eco-tourism. (Eco- tourism focuses on environmental awareness and education.). How would you classify the following projects in terms of compliance, strategic, and operational? (1 pt.) a. Convert the pool heating system from electrical to solar power (o) b. Build a 4-mile nature hiking trail (s) c. Renovate the horse barn (s) d. Replace the golf shop that accidentally burned down after being struck by lightning (s) e. Launch a new promotional campaign with Airlines (s) f. Convert 12 adjacent acres into a wildlife preserve (s) g. Update all the bathrooms in condos that are 10 years old or older (o) h. Change hotel brochures to reflect eco-tourism image (s) i. Test and revise disaster response plan (c) j. Introduce wireless Internet service in café and lounge areas (s) 2 - Your company can accept one of the three possible projects. Project A has a net present value (NPV) of US $30,000 and will take six years to complete. Project B has NPV of US $60,000 and will take three years to complete. Project C has NPV of US $90,000 and will take four years to complete. Based on this information, which project would you pick? (1 pt.) Solution: You can’t make an informed decision based on the information provided. All three projects have unique lives with discount rates unknown. It is not advisable to base your selection of the projects on their respective NPVs when they have non-identical durations. To properly compare such projects using NPV, one approach is to calculate NPV for “assumed“ Common Lifespans for the projects under comparison.
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quiz of project management
Transcript of Quiz 2 - With Solution
Solution to Quiz # 21 - You manage a hotel resort located on the South Beach on Grand Bay in Mauritius. You are shifting the focus of your resort from a traditional fun-in-the-sun destination to eco-tourism. (Eco-tourism focuses on environmental awareness and education.). How would you classify the following projects in terms of compliance, strategic, and operational? (1 pt.)
a. Convert the pool heating system from electrical to solar power (o)b. Build a 4-mile nature hiking trail (s)c. Renovate the horse barn (s)d. Replace the golf shop that accidentally burned down after being struck by lightning (s)e. Launch a new promotional campaign with Airlines (s)f. Convert 12 adjacent acres into a wildlife preserve (s)g. Update all the bathrooms in condos that are 10 years old or older (o)h. Change hotel brochures to reflect eco-tourism image (s)i. Test and revise disaster response plan (c)j. Introduce wireless Internet service in caf and lounge areas (s)
2 - Your company can accept one of the three possible projects. Project A has a net present value (NPV) of US $30,000 and will take six years to complete. Project B has NPV of US $60,000 and will take three years to complete. Project C has NPV of US $90,000 and will take four years to complete. Based on this information, which project would you pick? (1 pt.)
Solution:You cant make an informed decision based on the information provided. All three projects have unique lives with discount rates unknown. It is not advisable to base your selection of the projects on their respective NPVs when they have non-identical durations.
To properly compare such projects using NPV, one approach is to calculate NPV for assumed Common Lifespans for the projects under comparison.
So the answer to this question is that you will pick NONE based on the information provided in this question.
