PMP · Question 18 · Task 2: Evaluate and deliver project benefits and value
A project manager is evaluating two potential projects to recommend to the steering committee. <br/>Project A has an Internal Rate of Return (IRR) of 12% and a Payback Period of 3 years.<br/>Project B has an IRR of 18% and a Payback Period of 4 years.<br/>The organization's strategy is currently focused on maximizing long-term profitability over liquidity.<br/><br/>Which project should be recommended?
Answer options:
Project A, because it recovers the investment faster.
Project B, because it has a higher Internal Rate of Return.
Neither, as both payback periods exceed 2 years.
Project A, because lower IRR implies lower risk.
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