Cost management 20Q test

A randomized 20-question test on PMBoK Cost Management knowledge area.

Question 1 of 20

1. Which one of the following is incorrect?

1. SV and CV move together in the same direction during Project execution

2. If CPI is >1, CV has to be greater than 0

3. The Depreciation methods followed by a firm can impact its Net profit.

4. The NPV for an investment can be negative

Question 1 of 20

Question 2 of 20

2. You are in charge of a Project for establishment of an outsourcing Center. During the initial phases of the Project Lifecycle, capital items (like building and machinery) are procured intensively. The staffing Management Plan envisages joining of support staff from middle of the Project.

You are preparing two cost baselines for the Project – one for the likely costs relating to procurement of Capital items (Baseline A) and the other relating to likely staff expenses (Baseline B). Which of the following statements is likely to be correct in this scenario?

1. Baseline B will have a higher peak as compared to Baseline A

2. Baseline B will start rising after the rising of Baseline A

3. Baseline A will have a higher peak as compared to Baseline B

4. Baselines B and A will move together during the Project Lifecycle

Question 2 of 20

Question 3 of 20

3. A Project Manager is in midway though his Project. The EVM Analysis at this stage shows a value of CPI at 0.75 and SPI at 1.23.

The Project, which is being handled, consists of series of tasks, wherein resource reallocation is possible across tasks.
Which of the following would represent the best option for the Project Manager at this Stage?

1. Reduce resource allocation to non-critical tasks to bring the costs under control

2. Look for possibilities of shifting resources across tasks for a shorter schedule

3. Perform Monte Carlo analysis

4. Continue the Project as it is.

Question 3 of 20

Question 4 of 20

4. For a Project, the initial assigned Budget for $ 100. During the middle of the
Project, $ 60 has been spent so far and the EV is $ 50. What is the TCPI value?

1. 1.2

2. 1.25

3. 1.7

4. 1.0

Question 4 of 20

Question 5 of 20

5. There are two types of reserves used on projects. The __________ is to allow for future situations, which may be planned for only in part, whereas the _________ is for future situations, which are impossible to predict.

1. Unplanned reserve, planned reserve

2. Management reserve, contingency fund

3. Management reserve, unplanned allowance fund

4. Contingency fund, management reserve

Question 5 of 20

Question 6 of 20

6. Which of the following is the least likely reason to modify the cost baseline in a Project?

1. Cost of raw materials has increased substantially

2. Objective of the Project has changed.

3. More stakeholders have been added in between the Project

4. The Scope of work has been considerably changed.

Question 6 of 20

Question 7 of 20

7. You are mid way in a Project. The Project sponsor wants to know how much more money is likely to be spent on the Project. You use the formula
ETC = (BAC/CPI) – AC. What is the assumption made in this case?

1. Usually, the value of CPI may change during the Project.

2. Remaining work will be completed according to the budget.

3. Past cost performance will continue in future also.

4. The original estimate for the remaining work is faulty.

Question 7 of 20

Question 8 of 20

8. You are working on a road construction Project. The Project includes constructing tiled pavement as well. You utilize the total pavement area, cost of paving per square feet to estimate the pavement cost. The technique used herein is:

1. Vendor Bid Analysis

2. Expert judgment

3. Parametric Estimating

4. Analogous Estimating

Question 8 of 20

Question 9 of 20

9. For the home renovation project, the EVMS reports are as follows:

EV = 12

PV = 15

AC = 10

All values are in ‘000 $.

Which of the following statement is true?

1. The Project is likely to be completed early and will be completed under budget

2. The Project is likely to be delayed and will be over budget.

3. The Project is likely to be completed early and will be over budget.

4. The Project is likely to be delayed, but will be completed under budget.

Question 9 of 20

Question 10 of 20

10. Following are the numbers determined during a project review:

PV = 10 K $, EV = 8K $ and AC = 12 K $.

What is the CPI?

1. 1.2

2. 0.8

3. 0.6

4. 0.66

Question 10 of 20

Question 11 of 20

11. You are the Project manager for a building construction. All the baselines have been approved. The customer has now asked for a change in the scope. Which type of estimate will you use for further work?

1. Ballpark Estimate

2. Definitive estimate

3. Initial estimate

4. Order of magnitude estimate

Question 11 of 20

Question 12 of 20

12. A Project was scheduled to be performed by four resources for three weeks, working throughout the Project duration. During first week, only two resources were assigned, whereas during second week, two more resources joined in. At the end of second week, 40% of the value of the work had been completed. What is the CPI for this Project at the end of second week?

1. 0.8

2. 0.75

3. 0.6

4. 1.66

Question 12 of 20

Question 13 of 20

13. In a carpentry shop, it was required to complete 50 chairs at a cost of $250. As of today, 10 chairs are completed and $150 has been spent. What is the percent complete and percent spent?

1. 60%, 20%

2. 20%, 20%

3. 20%, 60%

4. 60%, 60%

Question 13 of 20

Question 14 of 20

14. You have just completed the preparation of cost baseline. You have all of the information now, except:

1. BAC

2. Value of work to be done

3. Planned time for Completion

4. AC

Question 14 of 20

Question 15 of 20

15. If the SPI of a Project is above 1 and the CPI is below 1, then the Project

Management may like to look into:

1. Mix of the resources deployed in the Project

2. Modification of some activities to do fast tracking

3. Addition of resources to do crashing

4. Project risks

Question 15 of 20

Question 16 of 20

16. A task was scheduled to use two persons, full time, and take two weeks to

complete. Instead, the project manager was only able to assign one person to this

task. At the end of two weeks, the person assigned to the task completed 75% of the

work. What is the cost performance index?

1. 0.5

2. 0.75

3. 1.33

4. 1.5

Question 16 of 20

Question 17 of 20

17. “Analogous Estimation” will be the preferred estimation technique to be used by the Project Manager in all of the following scenarios EXCEPT:

1. Work is scalable

2. This very work was done in another project in recent past

3. Resources performing the task are of similar experience level

4. Work is very similar to a previous project

Question 17 of 20

Question 18 of 20

18. A Project Manager is in midway though his Project. The EVM Analysis at this stage shows a value of SPI at 0.75 and CPI at 1.23.

The Project, which is being handled, consists of series of tasks, wherein resource reallocation is possible across tasks.
Which of the following would represent the best option for the Project Manager at this Stage?

1. Perform Monte Carlo analysis

2. Reduce resource allocation to non-critical tasks to bring the costs under control

3. The Cost Variance is more than zero, so continue the Project as it is.

4. Look for possibilities of shifting resources across tasks for a shorter schedule

Question 18 of 20

Question 19 of 20

19. You are a Software Project Manager developing a customized package for your customer. Your incentive depends on the value (costs) of the Project in a T & M mode.

You discover that the Project is being completed under target budget, thereby reducing your incentives.

How will you react to this situation?

1. Use costly resources to complete the Project

2. Report that the Project was finished on budget

3. Report the current true status to the Customer

4. Include additional features in the Project unilaterally

Question 19 of 20

Question 20 of 20

20. Which of the following may not be contained in the Cost Management Plan?

1. Management Reserve

2. Control Thresholds

3. Rules of Performance Measurement

4. Cost Reporting requirement

Question 20 of 20