AI Investment Justification CAIPM Practice Questions (Page 6)

Questions 26–30

1. 26expert · hard

   A government agency is planning an AI system for document classification. The initial development cost is low because the agency will use an open-source model. However, the agency must comply with strict data privacy regulations, requiring on-premises deployment and significant IT infrastructure upgrades. The team has estimated the hardware costs but has not accounted for the cost of training staff, ongoing model maintenance, or the opportunity cost of repurposing IT staff. What is the most significant risk to the accuracy of the TCO?

   • AUnderestimating the TCO because the hardware costs are too low.
   • BOverestimating the TCO because the agency is not paying for software licenses.
   • CUnderestimating the total cost of ownership by omitting indirect and ongoing costs.
   • DOverestimating the TCO because open-source software is free.
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2. 27application · medium

   A bank is seeking approval for an AI-powered loan underwriting system. The chief risk officer (CRO) is concerned about model bias and regulatory compliance, while the chief technology officer (CTO) is concerned about integration with legacy systems. The project manager is preparing the presentation for the investment committee. What is the most effective way to communicate the investment rationale to address both concerns?

   • AFocus only on the technical integration plan and mention compliance briefly
   • BAsk the CRO and CTO to resolve their concerns privately before the meeting
   • CPresent the financial benefits and avoid discussing risks to keep the presentation positive
   • DDedicate a section to risk mitigation, covering both regulatory compliance and technical integration
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4. 28foundation · easy

   Which of the following best defines Total Cost of Ownership (TCO) for an AI system?

   • AThe cost of cloud infrastructure required to run the AI model
   • BThe total of all direct and indirect costs over the system's entire lifecycle
   • CThe cost of hiring data scientists and AI engineers
   • DThe initial purchase cost of AI software licenses
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5. 29foundation · easy

   Which of the following should be included in a business case to present evidence to stakeholders?

   • AA personal recommendation from the project manager
   • BA detailed code review of the AI algorithms
   • COnly the expected benefits of the AI project
   • DQuantified cost and benefit estimates with supporting data
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6. 30application · medium

   A media company is considering an AI system that personalizes content recommendations. The financial ROI is expected to be modest, but the system is expected to increase user engagement and subscription retention, which are key strategic objectives. The CFO is focused on short-term profitability. How should the program manager present the investment case?

   • AFocus on the technical innovation and industry leadership, avoiding financial discussions.
   • BEmphasize the potential increase in customer lifetime value and subscription retention as financial benefits.
   • CPropose a pilot project to demonstrate the benefits before committing to full investment.
   • DArgue that the project is essential for staying competitive, regardless of ROI.
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