1⟩ Which of the following is NOT needed in order to come up with a project estimate? A. A WBS B. A network diagram C. Risks D. A change control system
D. A change control system
Cost Management
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49 Cost Management Questions And Answers
2⟩ A schedule performance index (SPI) of 0.76 means A. You are over budget B. You are ahead of schedule C. You are only progressing at 76 percent of the rate originally planned D. You are only progressing at 24 percent of the rate originally planned
C. You are only progressing at 76 percent of the rate originally planned
3⟩ A cost performance index (CPI) of 0.89 means A. At this time, we expect the total project to cost 89 percent more than planned B. When the project is completed we will have spent 89 percent more than planned C. The project is only progressing at 89 percent of the rate planned D. The project is only getting 89 cents out of every dollar invested
D. The project is only getting 89 cents out of every dollar invested
4⟩ Who has the cost risk in a fixed price (FP) contract? A. The team B. The buyer C. The seller D. Management
C. The seller
5⟩ The main focus of life cycle costing is to A. Estimate installation costs B. Estimate the cost of operations and maintenance C. Consider installation costs when planning the project costs D. Consider operations and maintenance costs in making project decisions
D. Consider operations and maintenance costs in making project decisions
6⟩ Cost performance measurement is BEST done through which of the following? A. Asking for a percent complete from each team member and reporting that in the monthly progress report B. Calculating earned value and using the indexes and other calculations to report past performance and forecast future performance C. Using the 50/50 rule and making sure the life cyde cost is less than the project cost D. Focusing on the amount expended last month and what will be expended the following month
B. Calculating earned value and using the indexes and other calculations to report past performance and forecast future performance
7⟩ Estimate at completion (EAC) is a periodic evaluation of A. The cost of work completed B. The value of work performed C. The anticipated total cost at project completion D. What it will cost to finish the job
C. The anticipated total cost at project completion
8⟩ If earned value (EV) = 350, actual cost (AC) = 400, planned value (PV) = 325, what is cost variance (CV)? A. 350 B. -75 C. 400 D. -50
D. -50
9⟩ One common way to compute estimate at completion (EAC) is to take the budget at completion (BAC) and A. Divide by SPI B. Multiply by SPI C. Multiply by CPI D. Divide by CPI
Divide by CPI
10⟩ Analogous estimating A. Uses bottom-up estimating techniques B. Is used most frequently during the executing processes of the project C. Uses top-down estimating techniques D. Uses actual detailed historical cost
C. Uses top-down estimating techniques
11⟩ All of the following are outputs of the Estimate Costs process EXCEPT A. An understanding of the cost risk in the work that has been estimated B. The prevention of inappropriate changes from being induded in the cost baseline C. An indication of the range of possible costs for the project D. Documentation of any assumptions made during the Estimate Costs process
B. The prevention of inappropriate changes from being induded in the cost baseline
12⟩ You have been asked to select between three projects. Project A has a net present value of $54,750 and will take six months to complete. Project B has a net present value of $85,100 and will take two years to complete. Project C has a net present value or $15,000 and a benefit-cost ratio of 52. Which project should you choose? A. Project A B. Project B C. Project C D. There is not enough information to decide.
B. Project B
13⟩ You've been hired by a large consulting firm to evaluate a software project for them. You have access to the CPI and EV for the project, but not the AC. The CPI is .92 and the EV is $172,500. How much money has actually been spent for the project? A. $158,700 B. $172,500 C. $187,500 D. There is not enough information to calculate the actual cost.
C. $187,500
14⟩ You are managing a project with a schedule performance index (SPI) of 1.07 and a cost performance index (CPI) of .94. How would you BEST describe this project? A. The project is ahead of scheule and within its budget. B. The project is behind schedule and within its budget. C. The project is ahead of schedule and over its budget. D. The project is behind schedule and over its budget.
C. The project is ahead of schedule and over its budget.
15⟩ You are project manager for a railroad construction project. Your sponsor has asked you for a forecast for the cost of project completion. Which of the following is the BEST metric to use for forecasting? A. EV and AC B. SV and CV C. ETC and VAC D. SPI and CPI
C. ETC and VAC
16⟩ You are managing a project with an EV of $15,000, PV of $12,000, and AC of $11,000. How would you BEST describe this project? A. The project is ahead of schedule and within its budget. B. The project is behind schedule and within its budget. C. The project is ahead of schedule and over its budget. D. The project is behind schedule and over is budget.
A. The project is ahead of schedule and within its budget.
17⟩ The customer responsible for overseeing your project asks you to provide a written cost estimate that is 30 percent higher than your estimate of the project's cost. He explains that the budgeting process requires managers to estimate pessimistically to ensure enough money is allocated for projects. What is the BEST way to handle this? A. Add the 30 percent as a lump sum contingency fund to handle project risks B. Add the 30 percent to your cost estimate by spreading it evenly across all project activities C. Create one cost baseline for budget allocation and a second one for the actual project management plan D. Ask for information on risks that would cause your estimate to be too low
D. Ask for information on risks that would cause your estimate to be too low
18⟩ A manufacturing project has a schedule performance index (SPI) of 0.89 and a cost performance index (CPI) of 0.91. Generally, what is the BEST explanation for why this occurred? A. The scope was changed B. A supplier went out of business and a new one needed to be found C. Additional equipment needed to be purchased D. A critical path activity took longer and needed more labor hours to complete
D. A critical path activity took longer and needed more labor hours to complete
19⟩ You are managing a project with AC = $25,100 , ETC = $45,600 , VAC = -$2,600, BAC = $90,000, and EAC = $92,100. Your sponsor asks you to forecast how much money you expect to spend on the remainder of the project. Which is the BEST estimate to use for this forecast? A. $45,600 B. $87,400 C. $90,000 D. $92,100
A. $45,600
20⟩ You are managing a construction project to install new door frames in an office building. You planned on spending $12,500 on the project, but your costs are higher than expected, and now you're afraid that your project is spending too much money. What number tells you the difference between the amount of money you planned on spending and what you've actually spent so far on the project? A. AC B. SV C. CV D. VAC
C. CV
