Project Management Assignment 7

Which of the following reserves allows for future situations that are unpredictable? a. Management reserves b. Cost baseline reserves c. Contingency reserves d. Known unknowns

a. Management reserves

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

a. They are time-intensive and expensive to develop.

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

a. Work performance data

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

a. managing changes to the project budget.

Good Earth, a company manufacturing packaged food products, sets up its stores in Baltonia. However, a year later, the company closes the store down due to high operating costs. In such a scenario, the money spent in paying for the rent of the store in Baltonia would be an example of _____ costs. a. sunk b. intangible c. direct d. recurring

a. sunk

Which of the following is true of analogous estimates? a. They use project characteristics in a mathematical model to estimate project costs. b. Their main disadvantage is that they cost more than other techniques. c. They are the only technique which do not require expert judgement. d. They are most reliable when previous projects are similar in fact with current projects.

d. They are most reliable when previous projects are similar in fact with current projects.

Which of the following is true of earned value? a. It is an estimate of the value of the physical work actually completed. b. It is also known as the planned value. c. It is the actual cost plus the planned cost. d. It is based solely on the total cost estimate to be spent on an activity.

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

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? a. Bottom-up estimates b. Analogous estimates c. Parametric estimates d. Definitive estimates

b. Analogous estimates

Which of the following is true of a rough order of magnitude estimate? a. It is a type of estimate that is done in the final stages of a project. b. It provides an estimate of what a project will cost. c. Its timeframe is always less than a year prior to project completion. d. It is used to allocate money into an organization's budget.

b. It provides an estimate of what a project will cost.

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. b. People lack estimating experience. c. Human beings are biased toward overestimation. d. Only software development provides the scope for estimates to be accurate.

b. People lack estimating experience.

_____ includes the processes required to ensure that a project team completes a project within an approved budget. a. Project quality management b. Project cost management c. Project time management d. Project scope management

b. Project cost management

Profits may be defined as: a. revenues plus expenses. b. revenues minus expenditures. c. expenses plus net income. d. costs plus revenues.

b. revenues minus expenditures.

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

c. budgetary

Indirect costs are: a. directly related to performing the project. b. those that can be easily controlled by managers. c. not directly related to the products or services of a project. d. those that cannot be allocated to projects.

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

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

c. the earned value minus the actual cost.

_____ is a method for determining the estimated annual costs and benefits for a project. a. Present value analysis b. Requirements analysis c. Critical path analysis d. Cash flow analysis

d. Cash flow analysis

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

d. Determining the budget

_____ are those costs that are difficult to measure in monetary terms. a. Fixed costs b. Direct costs c. Tangible costs d. Intangible costs

d. Intangible costs

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

d. cost budgeting

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

d. can be used to estimate the projected cost of completing the project.