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____ allow for future situations that may be partially planned for. A. Contingency reserves B. Management reserves C. Unknown unknowns D. Direct reserves

A

____ involves allocating the overall cost estimate to individual work items to establish a baseline for measuring performance. A. Determining the budget B. Consolidation of costs C. Controlling costs D. Estimating costs

A

Estimates are usually done at various stages of a project and should become more accurate as time progresses.

T

If a project manager gets sick for two weeks or an important supplier goes out of business, management reserve could be set aside to cover the resulting costs.

T

Many projects that are started never finish because of cost management problems.

T

Many projects, particularly information technology projects, do not have good planning information, so tracking performance against a plan might produce misleading information.

T

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

T

There does not need to be a change control system to define procedures for changing the cost baseline.

F

Every cost estimate is unique.

T

Direct costs cannot be directly attributed to a certain project.

F

Project managers should focus on ____, since they can control them. A. sunk costs B. indirect costs C. direct costs D. intangible costs

C

____ helps you develop an accurate projection of a project's financial costs and benefits. A. Profit cycle costing B. Financial costing C. Life cycle costing D. Profit margin costing

C

____ involve estimating individual work items or activities and summing them to get a project total. A. Actual estimates B. Parametric estimates C. Bottom-up estimates D. Analogous estimates

C

____ involves developing an approximation or estimate of the costs of the resources needed to complete a project. A. Determining the budget B. Consolidation of costs C. Controlling costs D. Estimating costs

D

____ is a method for determining the estimated annual costs and benefits for a project and the resulting annual cash flow. A. Life cycle costing B. Profit margin analysis C. Cost estimating D. Cash flow analysis

D

____ is the ratio of revenues to profits. A. Profit B. Profit margin C. Cost structure D. Cost margin

D

A ____ is used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs. A. budgetary estimate B. definitive estimate C. rough order of magnitude estimate D. final estimate

B

A large percentage of total project costs are often labor costs.

T

Any new technology or business process is untested and has inherent risks.

T

A definitive estimate should be the least accurate of the three types of estimates.

F

____ should be forgotten. A. Sunk costs B. Indirect costs C. Direct costs D. Intangible costs

A

A ____ is used to allocate money into an organization's budget. A. budgetary estimate B. definitive estimate C. rough order of magnitude estimate D. final estimate

A

Since organizations depend on reliable information technology, there are also huge costs associated with ____. A. work time B. technical planning C. uptime D. downtime

D

____ are costs that are not directly related to the products or services of the project, but are indirectly related to performing the project. A. Intangible costs B. Tangible costs C. Direct costs D. Indirect costs

D

____ includes the processes required to ensure that a project team completes a project within an approved budget. A. Cost budgeting B. Cost estimating C. Cost control D. Project cost management

D

____ use the actual cost of a previous, similar project as the basis for estimating the cost of the current project. A. Actual estimates B. Parametric estimates C. Bottom-up estimates D. Analogous estimates, TOP DOWN ESTIMATE

D

Although information technology projects have a poor track record in meeting project goals, they have a good track record in meeting budget goals.

F

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

F

If cost variance is a positive number, it means that performing the work cost more than planned.

F

If the cost performance index is less than one or less than 100 percent, the project is under budget.

F

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

F

Learning curve theory does not apply to the amount of time it takes to complete some tasks.

F

Cost budgeting provides information for project funding requirements.

T

ROM estimates can be referred to as a ballpark estimate, a guesstimate, a swag, or a broad gauge.

T

The cost management plan is part of the overall project management plan.

T

The formulas for variances and indexes start with EV, the earned value.

T

A(n) ____ might provide an estimate of $50 per line of code for a software development project based on the programming language the project is using, the level of expertise of the programmers, the size and complexity of the data involved, and so on. A. analogous cost estimate B. parametric model C. bottom-up estimate D. reserve analysis

B

____ allow for future situations that are unpredictable. A. Contingency reserves B. Management reserves C. Known unknowns D. Indirect reserves

B

____, with assistance from financial experts in their organizations, should create estimates of the costs and benefits of the project for its entire life cycle. A. Financial managers B. Project managers C. Budget managers D. System managers

B

A ____ is done very early in a project or even before a project is officially started. A. budgetary estimate B. definitive estimate C. rough order of magnitude estimate D. final estimate

C

A ____ provides an estimate of what a project will cost. A. budgetary estimate B. definitive estimate C. rough order of magnitude estimate D. final estimate

C

Organizations have a history of spending too much money in the early phases of information technology projects.

F

Parametric models are least reliable when historical information was used to create the model.

F

Preparing cost estimates is a job for accountants.

F

The WBS is not a required input when developing a cost estimate.

F

The people who develop software cost estimates often have a great deal of experience with cost estimation.

F

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

F

When developing an estimate for a large software project, estimates cannot be made before clear system requirements have been produced.

F

When justifying investments in new information systems and technology, the focus should only be on revenues or expenses.

F