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Free Practice Quiz Question List

4 Technological Change and Project Value Online Quiz Questions

Use this free practice quiz with 20 questions to review 4 Technological Change and Project Value, test your knowledge, and prepare for your next test or exam.

20 questions
01
True or false
1 point

True or false: A technology's performance improvement creates project value only if it addresses a real need and can be achieved in practice.

  1. A

    True

  2. B

    False

02
True or false
1 point

True or false: If a technology lets a project provide better service than its competitors, the project can assume that its competitive advantage will last.

  1. A

    True

  2. B

    False

03
Choose one
1 point

Specialized equipment still operates, but it is costly to maintain and cannot meet updated requirements. Which life estimate best captures the period the equipment remains useful and worthwhile?

  1. A

    The asset's physical life, because a functional asset remains worthwhile

  2. B

    The asset's economic life, because it may stop being worthwhile before it stops functioning

  3. C

    The asset's purchase period, because usefulness is set by its initial cost

  4. D

    The asset's replacement period, because no other life estimate is needed

04
Fill in the blank
1 point

When comparing feasible technology options, include a “do nothing” or .

05
Choose one
1 point

A project appraisal predicts that operating costs will fall as users gain experience with a new technology. What is the most defensible way to support this assumption?

  1. A

    Assume costs will fall because users gain experience

  2. B

    Use projected cost declines without checking how they occurred

  3. C

    Support expected learning-related cost declines with relevant historical evidence

  4. D

    Attribute every observed cost decline to user learning

06
Fill in the blank
1 point

When estimating whole-life costs, an appraiser should account for likely upgrades, replacements, downtime, and disposal or .

07
Written response
1 point

What term describes the period during which an asset remains useful and worthwhile?

08
Choose one
1 point

A vendor claims its equipment will substantially improve accuracy, but the project has no operating evidence for this model. How should the appraisal handle the claim?

  1. A

    Treat vendor claims as demonstrated results if the technology is available for purchase

  2. B

    Separate demonstrated performance from claims and early-stage projections

  3. C

    Exclude performance measures and compare purchase prices only

  4. D

    Assume projected improvements will occur if similar technologies have improved before

09
Choose all
1 point

An appraisal team wants to test assumptions that could materially change its results. Which scenarios should it include? Select all that apply.

  1. A

    Implementation takes longer than expected

  2. B

    The forecast is repeated with every assumption unchanged

  3. C

    Maintenance costs are higher than expected

  4. D

    The technology becomes obsolete earlier than expected

10
Choose all
1 point

A firm is considering a new technology that increases output but may require new staff skills and complementary investment. A competitor is also developing an alternative. Which considerations could affect the project's value? Select all that apply.

  1. A

    The technology increases output, but the appraisal should check whether the additional output can be sold

  2. B

    The new system may require additional skills and complementary investment

  3. C

    The technology's purchase price alone determines its value to the project

  4. D

    A competitor's innovation may make the project's assets less efficient by comparison

11
Open ended
1 point

A firm is choosing between conventional and automated equipment. Automation has a higher initial cost but may increase output and reduce labor costs. Describe how the firm should appraise the options, including key uncertainties to test and one way to limit exposure while it gathers evidence.

12
Choose one
1 point

An analyst compares two technology options with different purchase prices and expected replacement schedules. Which approach gives the fairest appraisal?

  1. A

    Compare purchase prices only, since the options have different technologies

  2. B

    Compare feasible options over the same appraisal period, including a baseline, and account for future costs and benefits

  3. C

    Compare each option over whichever period makes its results look strongest

  4. D

    Exclude replacement needs and residual value because they occur after implementation

13
True or false
1 point

An asset can remain physically functional after it has reached the end of its economic life. True or false?

  1. A

    True

  2. B

    False

14
Choose one
1 point

A vendor claims that its new equipment will increase capacity substantially, but the project has not tested the equipment. What is the most sound appraisal response?

  1. A

    Accept the projected gain as proven if the vendor includes it in a proposal.

  2. B

    Check whether the gain addresses a real need and distinguish demonstrated results from projections.

  3. C

    Assume the gain will create value whenever the technology increases capacity.

  4. D

    Exclude performance from the appraisal and compare purchase prices only.

15
Choose one
1 point

A technology's unit cost declined as production increased. How should an appraiser use this observation when forecasting future costs?

  1. A

    Assume that costs will fall at the same rate for every new technology.

  2. B

    Treat the decline as proof that users gain experience and no other factors matter.

  3. C

    Use relevant historical evidence and consider other possible causes of the decline.

  4. D

    Ignore past cost data because it cannot inform future cost estimates.

16
Choose one
1 point

A technology could let a project offer a service that competitors do not currently provide. Which appraisal approach is most appropriate?

  1. A

    Assume the project will retain its advantage for as long as the equipment functions.

  2. B

    Assess the advantage realistically, including whether it may be temporary and what adoption requires.

  3. C

    Count any capability competitors lack as a guaranteed increase in demand.

  4. D

    Exclude complementary investments because they do not affect competitive benefits.

17
Choose one
1 point

A project team is comparing several technology options with different expected lives. Which comparison setup best supports a fair appraisal?

  1. A

    Compare feasible options over a consistent period and include a baseline or do-nothing case.

  2. B

    Compare each option over a different period that best highlights its advantages.

  3. C

    Exclude the baseline because it does not involve a new technology.

  4. D

    Compare only the initial purchase costs of options that use new technology.

18
Written response
1 point

An option has a present value of benefits of £760 thousand and a present value of costs of £680 thousand. Using NPV=present value of benefits−present value of costs\text{NPV} = \text{present value of benefits} - \text{present value of costs}, what is its NPV? Enter the result in £ thousand.

19
Written response
1 point

A project faces substantial uncertainty and wants to limit its initial exposure while retaining the option to expand, modify, or stop after learning more. Name one decision approach it could use.

20
Written response
1 point

A project team is preparing early forecasts for a technology whose costs and delivery time may differ from plan. Where available, what evidence source should it use to ground those estimates? Enter a concise phrase.