Program Management Professional (PgMP) — Question 178

The program selection committee presents several programs for approval:
Program A is estimated to cost US$250,000, and has an annual cash inflow of US$75,000.
Program B is estimated to cost US$150,000, and has an annual cash inflow of US$55,000.
Program C is estimated to cost US$100,000, and has an annual cash inflow of US$45,000.
Program D is estimated to cost US$200,000, and has an annual cash inflow of US$35,000.
Which program was selected based solely on a three-year return on investment?

Answer options

• A. Program A
• B. Program B
• C. Program C
• D. Program D

Correct answer: C

Explanation

Program C is the correct choice because it has the highest return on investment over three years. The ROI for Program C is 35%, while Programs A, B, and D have lower returns of 30%, 36.67%, and 10.5% respectively, making them less favorable options.