Q5.

You are about to take over a project from another

project manager and find out the following information
Project Management Cost - 2nd about the project. Activity Z has and ES of day 15 and LS
of day 20. Activity Z is a difficult activity. CPI is 1.1, SPI is
0.8. There are 11 stakeholders on the project. Based on
Q1. A cost performance index (CPI) of 0.89 means: this information, which of the following would you be
the MOST concerned about?
A. When the project is completed, we will have spent
89% more than planned A. Cost

B. At this time, we expect the total project to cost 89% B. Float

more than planned
C. Schedule
C. The project is getting 89% out of every dollar
invested D. The number of available resources

D. The project is progressing at 89% of that planned Q6. A project manager is finalizing a project that
has had repeated problems with cost conformance.
Q2. The BEST description of costs that change with the He is concerned about what management will say.
amount of production is: Which of the following types of information would be
BEST for the project manager to use to evaluate
A. Variable costs performance?
B. Direct costs A. The CPI
C. Fixed costs B. A list of complaints from senior management
D. Sunk costs C. The project budget
Q3. The network expansion project you just took D. The last bar chart
over is said to be doing pretty well. The previous
project manager only used variances to report the Q7. You take over a project that is $100,000 over
current project status. In the last report, you find SV = budget. You know the team has completed $500,000
$50,000, CV = $10,000, PV = $500,000. You know the worth of work. Your sponsor has been calling all day
rate of spending and schedule progress is important as leaving message while you were in meeting asking for
well. Based on the details you have been given, what a quick update on the project status. What will you
are the SPI and CPI? tell him when you return his call?

A. 0.90, 1.02 A. The SPI is 1.10

B. 1.10, 1.02 B. The CPI is 0.83

C. 1.11, 0.98 C. The CPI is 0.90

D. 0.91, 0.98 D. The SPI is 0.83

Q4. A project manager discovers a work package has Q8. All the following are components of Cost
been completed for substantially less cost than planned. management EXCEPT:
Which of the following is NOT among the first
things to consider doing? A. Analogous estimating

A. Make sure all project processes were followed B. Estimate Activity resources

B. Make sure all the work was done C. Earned value management

C. Make sure the right resources were used D. Value analysis

D. Identify ways to increase the result

Q9. One common way to compute estimate at Q13. The main focus of life cycle costing is to:
completion (EAC) is to take the budget at
completion (BAC) and: A. Consider installation costs when planning the project
costs
A. Multiply by CPI
B. Consider operations and maintenance costs in
B. Divide by SPI making project decisions

C. Divide by cumulative CPI C. Estimate installation costs

D. Multiply by SPI D. Estimate the cost of operations and maintenance

Q10. You are tracking your project using earned Q14. A project manager has run into cost difficulties.
value management (EVM) and find you are behind The project scope must be completed, but at less cost.
schedule but under budget. Your variances show The project manager should:
schedule variance (SV) = -$50 million, cost variance (CV)
= $100 million, and your actual costs are $500 million. A. Evaluate benefit cost ratios
What are the CPI, PV, and SPI?
B. Recover some sunk cost
A. 1.20, -$100 million, 0.92
C. Perform a value analysis
B. 0.92, $650, 1.08
D. Change the depreciation method for the equipment
C. 0.92, $550 million, 1.20 used on the project

D. 1.20, $650 million, 0.92 Q15. A project manager has just been notified of a
cost increase by a seller. He looks at the contract
Q11. You are in the middle of a new product and determines that the seller has the right to pass
development project for your publicly traded along this cost increase. The project manager should
company when you discover the previous project FIRST determine if:
manager made a $3,000,000 payment that was not
approved in accordance with you company policies. A. Another seller can provide it at the original cost
Luckily, the project CPI is 1.2. What should you do?
B. Another activity can save money
A. Contact your manager
C. There is a reserve to handle the change
B. Ignore the payment
D. The activity is on the critical path
C. Put the payment in an escrow account
Q16. If EV = $300,000; AC = $350,000; and PV =
D. Bury the cost in the largest cost center available $375,000. What does the schedule performance index
(SPI) indicate?
Q12. The project budget is proving to be inaccurate. The
SPI is 1.1. The team has had some concerns about the A. You are progressing at 125% of the rate originally
risks in the next phase, and the sponsor has inserted planned
herself on the change control board. What is the BEST
B. You are only progressing at 86% of the rate originally
thing for the project manager to do?
planned
A. Re-estimate the activity duration
C. You are only progressing at 80% of the rate originally
B. Re-compute the critical path planned

C. Re-calculate the project budget D. You are progressing at 116% of the rate originally
planned
D. Encourage the sponsor to remove herself from the
change control board
Q17. A seller submits an invoice that is outside the Q21. Monitoring cost expended to date in order to
funding limit reconciliation completed during project detect variances from the plan occurs during:
planning. What is the LEAST likely cause?
A. Project performance reviews
A. The critical path was fast tracked during project
planning B. Updating the cost baseline

B. An activity has taken longer to complete that planned C. Recommending corrective actions

C. Equipment was received earlier than planned D. The creation of the cost change control system

D. There was a cost increase to the successor activity of Q22. A project team budgeted $3,000 for the work
a critical path activity performed and has spent $4,000 to date. If they
change $5,000 for the work scheduled, what is the cost
Q18. A large, complex construction project in a variance (CV)?
foreign country requires coordination to move
needed equipment through crowded city streets. To A. ($2,000)
ensure the equipments is transported successfully,
B. ($1,000)
your contact in that country informs you that you will
have to pay the local police a fee for coordinating C. $2,000
traffic. What should you do?
D. $1,000
A. Pay the fee
Q23. The BEST method to control costs is to:
B. Do not pay the fee if it is not part of the project
estimate A. Estimate during planning and then re-estimate
before each activity begins
C. Eliminate the work
B. Estimate during planning and have management
D. Do not pay the fee because it is a bribe confirm the estimates
Q19. Which of the following BEST describes the C. Estimate during project executing and then manage
meaning of the 50/50 rule? each activity to the budget
A. Grant 50% progress on an activity when it begins and D. Estimate at the beginning of the project and then
50% upon completion check costs against the baseline
B. Identify 50% of risks before you start to develop Q24. During which project management process group
responses are budget forecasts created?
C. 50% of the work is done by 50% of the people on the A. Initiating
project
B. Planning
D. The project is given credit for completing 50% of the
work when it finished C. Executing

Q20. A manufacturing project has a schedule D. Monitoring and controlling

performance index (SPI) if 0.89 and a CPI of 0.91.
Generally, what is the BEST explanation for why this Q25. Which of the following represents the estimated
occurred? value of the work actually accomplished?
A. Additional equipment needed to be purchased A. CV
B. A critical path activity took longer and needed more
labor hours to complete B. AC

C. The scope was change C. PV

D. A supplier went out of business and a new one
D. EV
needed to be found
Q26. Although the stakeholders thought there was D. Determine the cause of the overage
enough money in the budget, halfway through the
project the CPI is 0.7. To determine the root cause, Q30. Which of the following represents the value of
several stakeholders audit the project and discover work we have actually completed?
the project cost budget was estimated analogously.
A. Planned value
Although the activity estimates add up to the project
estimate, the stakeholders think something was B. Actual value
missing in how the estimate was completed. Which of
the following describes what was missing? C. Earned value

A. Estimated costs should be used to measure CPI D. Estimate to complete

B. Bottom-up costs estimating should have been used Q31. In which part of the cost management process is
EV used?
C. Past history was not taken into account
A. Creating the cost baseline and the cost control
D. SPI should be used, not CPI system
Q27. Your are a project manager for a small B. Reserve analysis and cost aggregation
construction project. Your project was budgeted for
$72,000 over a six week period. As of today, you’ve C. Forecasting and project performance reviews
spent $22,000 of your budget to complete work that
you originally expected would cost $24,000. According D. Performance measurement and variance
to your schedule, you should have spent $30,000 by management planning
this point. Based on these circumstances, your project
Q32. Estimate at completion (EAC) is a periodic
could be BEST described as:
evaluation of:
A. Under budget
A. The anticipated total cost at project completion
B. On budget
B. The value of work performed
C. Not having enough information provided
C. The cost of work completed
D. Over budget
D. What it will cost to finish the project
Q28. Your cost forecast shows you will have a cost
Q33. An EAC is an output of which of the following?
overrun at the end of the project. Which of the
following should you do? A. Performance measurement analysis
A. Meet with the sponsor to find out what work can be B. Project performance review
done sooner
C. Control Costs
B. Decrease scope
D. Variance management
C. Cut quality
Q34. A trend report was given to the project manager,
D. Eliminate risks in estimates and re-estimate who reacted to the report by investigating that activity
or activities had not been done, but should have been
Q29. Halfway through project executing, a team
done, to date. What did the report show?
member alerts you to a potential cost overrun for a
specific deliverable. What do you do FIRST? A. Actual cost was below planned and schedule process
was less than planned
A. Inform the customer
B. The SPI was 1.3 and EAC was greater than planed
B. Determine the projected actual cost
C. The BAC was higher than planned
C. Implement a change control process to track the
change D. The CPI was 0.8 and SPI was 1.2
Q35. A SPI of 0.76 means: C. The project is getting $2 of work for every dollar
spent
A. You are ahead of schedule
D. The project is proceeding at 100% of the expected
B. You are progressing at 76% of the rate originally rate
planned
Q40. Your project is being completed in another
C. You are progressing at 24% of the rate originally country. It is going reasonably well and is ahead of the
planned cost projections when one of the local officials informs
you he will make sure the project work stops unless you
D. You are over budget
pay him $50. What is the BEST thing to do?
Q36. Recommended corrective actions result from
A. Offer to pay more than the requested amount
which of the following?
to get more support from the official in the future
A. Cost aggregation
B. Make the payment
B. Reserve analysis
C. Do not make the payment
C. Bottom-up estimating
D. Offer to pay a smaller amount to discourage future
D. Control Costs requests for larger amounts.

Q37. Which of the following payments on an Q41. TCPI is represented by which of the following?
international project is unacceptable?
A. BAC - EV/BAC - AC
A. Offering to pay the country officials for not awarding
B. AC + (BAC - EV)
the project to a particular company
C. A measure of the value of work completed compared
B. Payment for mail service
to the actual cost or progress
C. Payment for police protection
D. A measure of progress achieved compared to
D. Payment for a “foreign workers application license” progress planned
required in the county
Q42. Earned value measurement is an example of:
Q38. Calculating ETC is done in:
A. Planning control
A. Project initiating
B. Integrating the project components into a whole
B. Project monitoring and controlling
C. Ishikawa diagrams
C. Project planning
D. Performance reporting
D. Project executing
Q43. Cost performance measurement is BEST done
Q39. You are a project manager working on a through which of the following?
project that requires 100 items to be tested, spaced A. Asking for a percent complete from each team
evenly over five weeks. You have just begun week member and reporting that in the monthly progress
three, with an overall budget of $10,000. To date, report
you have spent $2,000 with 40 items tested B. Focusing on the amount expended last month and
successfully. What does the CV tell you in this what will be expended the following month
circumstance?
C. Calculating earned value and using the indexes
A. The project is $2,000 under budget and other calculations to report past performance
and forecast future performance
B. The project is on budget
D. Using the 50/50 rule and making sure the life cycle
cost is less than the project cost
Q44. A project is over budget to date. Which of the Q48. If EV = 350, AC = 400, and PV = 325, what is the
following is NOT a reason this could have occurred? CV?

A. There was a cost increase from the supplier A. -50

B. Work was delayed B. 350

C. More work than planned was accomplished C. -75

D. Work was done inefficiently D. 400

Q45. Which of the following is the LEAST effective way Q49. Cost risk means:
to influence the factors that create changes to the cost
baseline? A. There is a risk that the cost of the project will be
lower than planned
A. Eliminate the scope causing the most changes
B. There is a risk that project costs could go higher than
B. Notify all stakeholders that no more changes will be planned
allowed
C. The project is too risky from a cost perspective
C. Explain to those requesting changes the impact of
changes to the project D. There are risks that will cost the project money

D. Review the project scope with the functional manger Q50. What does EAC mean?
responsible for the greatest number of requested
A. Estimated average cost at project completion
changes
B. Each anticipated cost for the project
Q46. You are working for an international
construction company. Your project involves pulling C. Anticipated total cost at project completion
together over 13 different subprojects. You are having
difficulty in ensuring three subcontractors are doing D. Anticipated expenses at project completion
their work correctly. As you review the project
results, you notice you have spent $1,200,000 at the
last reporting point. You know the schedule is not too
bad, since your SPI is 1.1. Considering you feel you
should have spent $1,300,000 to this point, what are
the CPI, and the SV and CV?

A. 1.1; ($230,000); and $130,000

B. 1.19; $130,000; and $230,000

C. 1.19; $230,000; and ($230,000)

D. 1.43; $130,000; and ($130,000)

Q47. Your company is in competition to win a

major project for the government of a country. Your
contacts in that country inform you that you must
make a larger payment to the foreign minister to be
considered for the project. What should you do?
A. Do not make the payment
B. Have the local contact make the payment
C. Make the payment
D. Inform you company’s management, and ask or
direction