Chapter 9 Quiz

Which method provides the least accuracy when estimating total project cost? a. Expert opinion b. Analogy c. Parametric d. Cost engineering

a. Expert opinion

A time-phased budget shows project costs budgeted over time according to project schedules. a. True b. False

a. True

Which of the following statements is NOT true about cost estimating? a. the expert opinion method is the same as the cost engineering method b. the analogy method requires that a similar project or work task was done previously c. the parametric method is an estimate based on a mathematical formula d. the analogy method can take into account differences between projects e. it might involve several methods simultaneously, such as expert opinion, analogy, and cost engineering

a. the expert opinion method is the same as the cost engineering method

If the target cost is $235,000, which of the following is the most precise estimate: a. $236,000 b. $237,342 c. $233,500 d. $200,000

b. $237,342

The estimate providing the best accuracy for total project cost comes from: a. Looking at the project top-down as a whole b. Combining estimates from all the work packages c. Looking at the cost of similar, completed projects d. The cost constraint specified by the customer

b. Combining estimates from all the work packages

Cost escalation always results in the contractor charging the customer more than the original contract specified. a. True b. False

b. False

If a cost estimate comes up too high, a good way to reduce it is to uniformly cut costs by a certain percentage for everything on the project. a. True b. False

b. False

Product lifecycle costs are the same as project lifecycle costs. a. True b. False

b. False

The process of breaking the project into work packages through the WBS has no relevancy to cost estimating. a. True b. False

b. False

The project cost estimate is derived from the project target cost. a. True b. False

b. False

The top-down approach to cost estimating provides greater cost accuracy than the bottom-up approach. a. True b. False

b. False

When we speak of recurring costs, we usually associate these costs with one-of-kind or first-of-a-kind items a. True b. False

b. False

Which of the following statement is not true for life cycle costs? Life cycle costs... a. are used by designers and engineers to make key design and procurement decisions b. are the costs to develop and build a system c. account for the operation and maintenance of the end item system d. are sometimes used to establish target costs on the project or system e. are estimated by a team that includes designers, builders, user, and suppliers

b. are the costs to develop and build a system

If the actual cost turns to be $234,000, which of the following is the most accurate estimate? a. $236,000 b. $237,342 c. $233,500 d. $200,000

c. $233,500

Which method relies on formulas and tables to estimate project costs? a. Expert opinion b. Analogy c. Parametric d. Cost engineering

c. Parametric

A contingency amount can be: a. Applied to individual activities b. Applied to the project as a whole c. Continually increased to cover cost escalation d. a and b only

d. a and b only

The major problem with using traditional budgets for projects is that they: a. are annual in nature b. are usually divided into functional areas c. focus on project objectives d. a and b only

d. a and b only

Which of the following are potential ways to reduce cost escalation? a. using a variable price contract b. making estimates by people who tend to be optimistic c. making final cost estimates at the earliest possible date in the planning process d. monitoring and controlling project costs and activities

d. monitoring and controlling project costs and activities

The project planning and estimating process should do all but which of the following? a. use a top-down approach to disseminate information about project goals to lower levels b. use a bottom up approach to prepare and check labor and cost estimates c. employ pricing units to decide on areas of work needed and to prepare labor hour estimates d. rely upon work package supervisors to authorize when work packages should begin

d. rely upon work package supervisors to authorize when work packages should begin