Question - ROI

Which is not true in regard of RoI (Return on Investment) for a project?

A. It defines the cumulated net income from an investment at a given point in time or during a defined period.

B. It includes investment, direct and indirect costs and may include allowances for capital cost, depreciation, risk of loss, and/or inflation.
C. It is most commonly stated as a percentage of the investment or as a dimensionless index figure.

D. It is the time when cumulated net income is equal to the investment.

Answer : D

Is it because we talk about time and, roi is about Money $ or % instead of time ?

admin's picture

Yes , it seems like that 

Weird questions but good to know 

rkraneis's picture

Philz,

I don't know where that question came from, I agree with "admin", I think it's a weird question.

I also think "D" is flat out wrong (hate to disagree with Admin).

First, I read the question, thought it was poorly done, but chose "C" as my answer.  I didn't like the "or dimensionless index figure" gibberish, but ROI is stated as a percentage.

Second, I researched my PMBOK 4 book (yes, I know we're in PMBOK 5), researched my Rita, Heldman, and Akhter books in the index.  PMBOK had "return on investment" in their index but didn't even describe it well on its two pages.  Rita described it well but had no example of the formula.  Heldman didn't have it in her index (she can't always be perfect).

And the clear winner for the best description of ROI?  It was Sohel Akhter's book on page 76.

"ROI - Is a percentage that shows what return a company can make by investing in a project or some other endeavor."

"ROI = (Benefit - Cost)/Cost"

When you're researching these questions, research PMBOK, your other books, and your notes.  You'll find the answer as I did

But don't worry about the answer.  In the actual test you have 1.2 minutes for each question.  I tell my clients, they have one minute per question.

Every question is a "basketball rebound".  Grab the rebound or miss it, and move onward.  If you "grab enough rebounds" or answer enough questions properly, you pass the PMP.

Best Wishes on Passing the PMP,

Richard Kraneis, PMP
Chicago, IL  USA

thanks !

В seems to be a Playback - so it is not ROI