PMI Agile Certified Practitioner (ACP) Practice Exam

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What does a high ROI indicate regarding a project?

  1. A significant loss in investment

  2. A lower return than expected

  3. A favorable financial return on investment

  4. A project with excessive risks

The correct answer is: A favorable financial return on investment

A high return on investment (ROI) indicates that the financial gain from a project significantly exceeds the amount invested in it. This metric is essential in evaluating the profitability of an endeavor; a higher ROI reflects a successful project that generates substantial revenue compared to its costs. Investors and stakeholders often seek high ROI as it demonstrates effective utilization of resources, contributing positively to an organization’s bottom line and overall financial health. In contrast, the other options do not accurately represent what high ROI signifies. A significant loss in investment or a lower return than expected clearly conveys a negative financial outcome. Additionally, describing a project with excessive risks does not inherently correlate with ROI unless those risks lead to diminished returns. Therefore, the focus on favorable financial returns is what makes this answer particularly relevant in the context of evaluating a project's success.

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