System Analysis and Design: Project Management, Ch7

_____ are those costs that are difficult to measure in monetary terms.

Intangible costs

Profits may be defined as:

revenues minus expenditures.

Which of the following types of estimate use the actual cost of a previous, similar project as the basis for estimating the cost of the current project?

Analogous estimates

Budgetary estimates are made even before a project is officially started.

False

Contingency reserves are also known as unknown unknowns.

False

If the cost performance index (CPI) is less than 100 percent, the project is under budget.

False

In an earned value chart, when the actual cost line is right on or above the earned value line, it indicates that costs are less than planned.

False

Which of the following is most likely to be a reason for inaccuracies in information technology cost estimates?

People lack estimating experience.

_____ includes the processes required to ensure that a project team completes a project within an approved budget.

Project cost management

One of the main outputs of the ______ process is a cost baseline.

Cost budgeting

A budgetary estimate is the most accurate of the three types of estimates.

False

A negative schedule variance means that it took lesser than planned to perform the work.

False

Intangible costs can be easily measured in monetary terms.

False

The primary output of the planning cost management process is a change request.

False

When deciding what projects to invest in or continue, one should include sunk costs.

False

Which of the following is true of earned value?

It is an estimate of the value of the physical work actually completed.

The process of controlling costs primarily involves:

Managing changes to the project budget

_____ uses project characteristics in a mathematical model to estimate project costs.

Parametric estimating

A cost management plan can include organizational procedures links, control thresholds, and process descriptions.

True

Determining the budget involves allocating the project cost estimate to individual work items over time.

True

One of the reasons why project cost estimates are inaccurate is because human beings are biased toward underestimation.

True

Spreadsheets are a common tool for cost estimating, cost budgeting, and cost control.

True

The project management plan and project funding requirements are inputs of the process of controlling costs.

True

A rough order of magnitude estimate can be referred to as a _____ estimate.

ballpark

The main goal of the _____ process is to produce a cost baseline for measuring project performance and project funding requirements.

cost budgeting

Which of the following is an output of the process of controlling costs?

cost forecasts

Which of the following is true of a rough order of magnitude estimate?

it provides and estimate of what a project will cost

Indirect costs are:

not directly related to the products or services of a project.

Which of the following is true of contingency reserves?

they allow for future situations that can be partially planned for.

The first step in project cost management is:

to plan how costs will be managed