PMP Chapter 7 Quiz Questions

If earned value (EV)=350, actual cost (AC)=400, and planned value (PV)=325, what is cost variance (CV)?

-50

The cost contingency reserve should be:

added to the costs of the project to account for risks

Early in the life of your project, you are having a discussion with the sponsor about what estimating techniques should be used. You want a form of expert judgement, but the sponsor argues for analogous estimating. It would be BEST to:

agree to analogous estimating, as it is a form of expert judgement

The customer responsible for overseeing your project asks you to provide a written cost estimate that is 30% 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?

ask for information on risks that would sue you estimate to be too low

A schedule performance index (SPI) of 0.76 means:

you are progressing at 76% of the rate originally planned

Identified risks are:

both an input to and an output of the Estimate Cost process

Which estimating method tends to be MOST costly for creating a project cost estimate?

bottom-up

Although the stakeholders thought there was enough money in the budget, halfway through the project the cost performance index (CPI) is 0.7. To determine the root cause, several stakeholders audit the project and discover the project cost budget was estimated analogously. Although the activity estimates add up to the project estimate, the stakeholders think something was missing in how the estimate was completed. Which of the following describes what was missing?

bottom-up estimating should have been used

Your project has a medium amount of risk and is not very well defined. The sponsor hands you a project charter and asks you to confirm that the project ca be completed within the project cost budget. what is the BEST method to handle this?

build an estimate in the form of a range of possible results

You have just completed the initiating processes of a small project and are moving into project planning when a project stakeholder asks you for the project's budget and cost baseline. What should you tell her?

the project budget and baseline will not be finalized and accepted until the planning processes are completed

A cost performance index (CPI) of 0.89 means:

the project is getting 89 cents out of every dollar invested

Cost risk means:

there is a risk that project costs could go higher than planned

Analogous estimating...

uses top-down estimating techniques

A rough order of magnitude estimate is made during which project management process group?

initiating

During which project management process group are budget forecasts created?

monitoring and controlling

Earned value measurement is an example of:

performance reporting

Monitoring cost expended to date in order to detect variances from the plan occurs during:

project performance reviews

A cost management plan contains a description of:

the WBS level at which earned value will be calculated

Estimate at completion (EAC) is a periodic evaluation of:

the anticipated total cost at project completion

The difference between the cost baseline and the cost budget can be BEST described as:

the management reserves

Which of the following is NOT needed in order to come up with a project estimate?

change requests

All of the following are outputs of the Estimate Costs process EXCEPT:

the prevention of inappropriate changes from being included in the cost baseline

Which of the following are ALL items included in the cost management plan?

Specifications for how estimates should be stated, rules for measuring cost performance, and the level of accuracy needed for estimates

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 critical path activity took longer and needed more labor hours to complete

Value analysis is performed to get:

a less costly way of doing the same work

Cost performance measurement is BEST done through which of the following?

calculating earned value and using the indexes and other calculations to report past performance and forecast future performance

The main focus of life cycle costing is to:

consider operations and maintenance costs in making project decisions

A cost baseline is an output of which cost management process?

determine budget

The project manager is allocating overall cost estimates to individual activities to establish a baseline for measuring project performance. What process is this?

determine budget

Which type of cost is team training?

direct

A project manager needs to analyze the project costs to find ways to decrease costs. It would be BEST if the project manager looks at:

direct costs and variable costs

One common way to compute estimate at completion (EAC) is to take the budget at completion (BAC) and...

divide by CPI

Which of the following is an example of a parametric estimate?

dollars per module

Which of the following represents the estimated value of the work actually accomplished?

earned value (EV)

Your cost forecast shows that you will have a cost overrun at the end of the project. Which of the following should you do?

eliminate risks in estimates and re-estimate

Project setup costs are an example of:

fixed costs

You are having difficulty estimating the cost of a project. Which of the following BEST describes the most probable cause of your difficulty?

inadequate scope definition

You provide a project cost estimate for the project to the project sponsor. He is unhappy with the estimate, because he thinks the price should be lower. He asks you to cut 15% off the project estimate. What should you do?

inform the sponsor of the activities to be cut