Free PMI Project Management Professional (PMP) Practice Question

The correct answer is that Project A is more financially attractive. Net Present Value (NPV) is a financial metric that calculates the present value of all future cash flows, both incoming and outgoing, over the life of a project. A higher NPV indicates that a project is expected to generate more value for the organization. In this case, Project A has a higher NPV ($250,000) compared to Project B ($200,000), making it the more financially attractive option.

It's important to note that while NPV is a valuable tool for project selection, it should not be the sole criterion. Other factors such as strategic alignment, resource availability, and risk should also be considered. Additionally, the NPV calculation assumes that the discount rate and cash flow projections are accurate, which may not always be the case in real-world scenarios.