PI c7

21. A cost estimation tool which is used to allocate money into an organization's budget is known as a _____ estimate. a. budgetary c. rough order of magnitude b. definitive d. ballpark

A

6. Work performance information and cost forecasts are main outputs of the _____ process. a. cost budgeting c. cost control b. cost estimating d. cost pricing

C

33. Which of the following is an input of the process of controlling costs? a. Cost forecasts c. Change requests b. Work performance data d. Scope baseline

B

20. A rough order of magnitude estimate can be referred to as a _____ estimate. a. definitive c. final b. budgetary d. ballpark

D

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

F

16. Analogous estimates are called activity-based costing.

F

17. Analogous estimates are the most accurate technique to estimate costs.

F

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

F

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

F

13. Definitive estimates are made one year or less prior to project completion.

T

3. IT project managers must be able to present and discuss project information both in financial and technical terms

T

4. Project managers must conduct cash flow analysis to determine net present value.

T

22. A _____ estimate is used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs. a. budgetary c. rough order of magnitude b. definitive d. final

B

29. Which of the following is most likely to be a reason for inaccuracies in information technology cost estimates? a. Estimates take a long time to be worked out. c. Human beings are biased toward overestimation. b. People lack estimating experience. d. Only software development provides the scope for estimates to be accurate.

B

4. One of the main outputs of the _____ process is a cost baseline. a. cost controlling c. cost budgeting b. cost estimating d. cost planning

C

3. _____ involves allocating the overall cost estimate to individual work items to establish a baseline for measuring performance. a. Determining the budget c. Controlling costs b. Finalising policies for project costs d. Estimating costs

A

31. The main goal of the _____ process is to produce a cost baseline for measuring project performance and project funding requirements. a. cost budgeting c. cost controlling b. cost planning d. cost estimating

A

32. Which of the following is an output of the process of controlling costs? a. Cost forecasts c. Basis of estimates b. Project funding requirements d. Scope baselines

A

38. Schedule variance is: a. the earned value minus the planned value. c. the planned value plus the earned value. b. the earned value minus the actual cost. d. the planned value plus the rate of performance.

A

40. Which of the following is true of the schedule performance index (SPI)? a. It can be used to estimate the projected time to complete the project. c. It means that a project is ahead of schedule if SPI is lesser than one or hundred percent. b. It means that a project is behind schedule if an SPI is greater than one. d. It is the ratio of planned value to actual costs.

A

37. Cost variance is: a. the planned value plus actual costs. c. the rate of performance minus earned value. b. the earned value minus the actual cost. d. the planned value minus the rate of performance.

B

39. The cost performance index (CPI): a. indicates that a project is under budget if CPI is less than one. c. indicates that the planned and actual costs are equal if CPI is more than one. b. can be used to estimate the projected cost of completing the project. d. is the ratio of earned value to planned value.

B

5. The process of controlling costs primarily involves: a. determining the policies for project costs. c. finalising the procedures for project costs. b. managing changes to the project budget. d. determining a basis for estimates.

B

27. Which of the following is true of bottom-up estimates? a. They are based on the actual cost of a previous, similar project. c. They are most accurate when they involve large, extensive work items. b. They are also known as parametric estimating. d. They are time-intensive and expensive to develop.

D

34. The budget is one of the three values of earned value management and is also known as _____. a. earned value c. indirect cost b. actual cost d. planned value

D

7. It is important for project managers to focus on indirect costs because they can be easily controlled.

F

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

T