Project Management Professional (PMP) Practice Exam

Question: 1 / 400

What is best used to calculate the profit from an internal project?

Discounted net revenues from the product over n years minus project costs for internal charges

Discounted net savings from the product over n years minus project costs for internal charges

The economic value added (EVA) to the organization taking into account taxes and capital costs

The best method to calculate the profit from an internal project is the economic value added (EVA) to the organization, taking into account taxes and capital costs. This is because EVA provides a more comprehensive measure of profit compared to the other options. Option A, discounted net revenues from the product, only considers revenue and ignores expenses such as taxes and capital costs. Option B, discounted net savings, also focuses on savings rather than overall profit. Option D, reduction in total cost of ownership, only takes into account cost differences and may not accurately reflect the profit earned. Therefore, option C is the most suitable choice for calculating the profit of an internal project.

Get further explanation with Examzify DeepDiveBeta

The reduction in total cost of ownership (TCO) of the current product compared with its predecessor product

Next Question

Report this question

Download Project Management Professional (PMP) Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy