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IRR, NPV, etc. 1 year 9 months ago #29623

  • Walter Ramos
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Do I have to calculate these types of values in the exam? I heard that calculations are no longer asked but only an understanding of the terms.

What I mentioned above can be found in PMP Exam Study Guide by Belinda S. Goodrich page 61. Another source is edward-designer.com/web/pmp-benefit-anal...0will%20lose%20money
Last edit: by Walter Ramos. Reason: I just want to add some context here.

IRR, NPV, etc. 1 year 9 months ago #29637

  • Lisa Sweeney PMP
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You have great timing for your question, Walter.

Last week, Cornelis and PM PrepCast launched his newest offering, The PMP® Exam Formula Study Guide on a live broadcast. Highlighted in his kickoff were the critical "interpretational formula questions", a fairly new addition by PMI. The exam increasingly looks at how you follow up on the results of calculations. To help you conquer these, the new guide walks you through practice examples and sharpens your ability in preparation for the exam and beyond.

Here are a couple of the guide's examples:

• Your project has a CV of -200. What does this mean for your project?

• The project leader has calculated a cost performance index (CPI) of 0.92. Based on this information, what else can be said of the project’s performance?

On my exam, I answered one float problem without a Critical Path diagram, one CPI problem, and one PERT calculation, although I was prepared for questions on Internal Rate of Return (IRR) and Net Present Value (NPV). It's important to understand the profitability of an investment to determine if indeed that investment should be made.

Your best bet? Check out the new PMP® Exam Formula Study Guide. It's worth the small investment for the test and is a good source for real-time work, too.

I wish you the best, Walter!
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