PMI-ACP Practice Questions #92
A financial services company is developing a mobile banking application and needs to prioritize features.
The Product Owner and the development team are conducting a backlog refinement session where they analyze each feature’s estimated development cost, expected monthly revenue, and the time required to build it.
The company is making a prioritization decision in January and will only consider the ROI for the current calendar year (January to December, 12 months). Your team alone will be working on the selected feature.
Which feature should be prioritized for development?
A. Instant Fund Transfers – Estimated development cost $60,000, development duration 4 months, expected monthly benefit $12,000.
B. Utility Bill Payments – Estimated development cost $80,000, development duration 3 months, expected monthly benefit $9,000.
C. Credit Card Application – Estimated development cost $50,000, development duration 2 months, expected monthly benefit $10,000.
D. Download Past Transactions – Estimated development cost $40,000, development duration 1 month, expected monthly benefit $5,000.
Analysis
This question is focused on ROI-based prioritization in Agile backlog refinement. The goal is to identify the feature that provides the highest return on investment (ROI) within the current calendar year (January to December).
To calculate ROI correctly:
- Consider only the months in which the feature will generate revenue (i.e., after development is completed).
- Calculate total benefit: (Months available for revenue generation) × (Expected monthly revenue).
- Calculate ROI: (Total benefit – Development cost) ÷ Development cost.
The correct approach is to select the feature with the highest ROI, ensuring that development cost is justified by the revenue it generates within the given timeframe.
Analysis of Options
A: Instant Fund Transfers – Estimated development cost $60,000, development duration 4 months, expected monthly benefit $12,000.
- Development time: 4 months, so revenue starts in Month 5 (8 months of revenue).
- Total benefit = $12,000 × 8 = $96,000.
- ROI = ($96,000 – $60,000) / $60,000 = 60%.
- While this provides a good return, we need to compare it with the other options.
B: Utility Bill Payments – Estimated development cost $80,000, development duration 3 months, expected monthly benefit $9,000.
- Development time: 3 months, so revenue starts in Month 4 (9 months of revenue).
- Total benefit = $9,000 × 9 = $81,000.
- ROI = ($81,000 – $80,000) / $80,000 = 1.25%.
- Very low ROI, making this an unattractive option.
C: Credit Card Application – Estimated development cost $50,000, development duration 2 months, expected monthly benefit $10,000.
- Development time: 2 months, so revenue starts in Month 3 (10 months of revenue).
- Total benefit = $10,000 × 10 = $100,000.
- ROI = ($100,000 – $50,000) / $50,000 = 100%.
- Highest ROI among all options, making this the best choice.
D: Download Past Transactions – Estimated development cost $40,000, development duration 1 month, expected monthly benefit $5,000.
- Development time: 1 month, so revenue starts in Month 2 (11 months of revenue).
- Total benefit = $5,000 × 11 = $55,000.
- ROI = ($55,000 – $40,000) / $40,000 = 37.5%.
- While it has a positive ROI, it is significantly lower than Option C.
Conclusion
The best feature to prioritize is Option C (Credit Card Application) because it provides the highest ROI (100%) within the given time frame. It offers a quick development time (2 months) and generates substantial revenue, making it the most valuable feature to deliver first.
PMI – ACP Exam Content Outline Mapping
| Domain | Task |
| Product | Refine Product Backlog |
| Product | Manage Value Delivery |
Topics Covered:
- ROI-based prioritization for backlog refinement
- Evaluating cost-benefit analysis within a fixed time frame
- Calculating return on investment (ROI) based on expected revenue and development time
- Prioritizing high-value, quick-to-market features to maximize business impact
- Ensuring Agile decision-making aligns with financial goals
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