CPIT APM Practice Questions - CPIT Associate Project Manager Exam

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An IT governance board in a Hong Kong financial institution is evaluating two software development projects. Project A has an initial investment of HK$2,000,000 and a Net Present Value (NPV) of HK$450,000. Project B has an initial investment of HK$3,500,000 and an NPV of HK$600,000. Based strictly on the Net Present Value rule, which project should the board select?

Project A, because it has a lower initial investment and thus less financial risk. Project B, because it has a higher Net Present Value, which maximizes wealth creation. Neither project, because the investments exceed the NPV, indicating a negative return. Both projects, by combining their NPVs and splitting resources equally.

Correct Answer:

Project B, because it has a higher Net Present Value, which maximizes wealth creation.

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