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The document contains a series of project management questions and answers related to budgeting, cost variance, and project selection. It includes scenarios for evaluating project performance, estimating costs, and understanding financial metrics such as Net Present Value and Internal Rate of Return. Additionally, it covers concepts like earned value analysis and cost risk in fixed price contracts.

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emohamedkishk
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5 views7 pages

7

The document contains a series of project management questions and answers related to budgeting, cost variance, and project selection. It includes scenarios for evaluating project performance, estimating costs, and understanding financial metrics such as Net Present Value and Internal Rate of Return. Additionally, it covers concepts like earned value analysis and cost risk in fixed price contracts.

Uploaded by

emohamedkishk
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Questions & Answers

1) You are a project manager working on a project that


requires 100 widgets to be built in five weeks. You
have just begun week three, with an overall budget of
US $10,000. To date you have spent US $2,000 with
40 widgets successfully built. What does the cost
variance tell you in this circumstance?

A. The project is proceeding at 100% of the expected rate


B. The project is $2000 under budget
C. The project is on budget
D. The project is getting $2 of work for every dollar spent

Questions & Answers


2) You are a project manager for a small construction
project. Your project was budgeted for US $72,000
over a six week period. As of today, you've spent US
$22,000 of your budget to complete work that you
originally expected would cost US $24,000. According
to your schedule, you should have spent US $21,000
by this point. Based on these circumstances, your
project could be BEST described as:

A. Over budget
B. On budget
C. Under budget
D. Not having enough information provided
Exercise: Accounting Standards

Project A Project B Choice

Net present V $95.00 $75.00 A

IRR 13% 17% B

Payback Period 21 Month 16 Month B

Benefit Cost Ratio 2.79 1.3 A

Questions & Answers


1) You have four projects from which to choose one. Project A
is being done over a six year period and has a Net Present
Value (NPV) of US $70,000. Project B is being done over a
three year period and has a NPV of US $30,000. Project C is
being done over a five year period and has an NPV of US
$40,000. Project D is being done over a one year period and
has an NPV of US $60,000. Which project would you
choose?

A. Project A
B. Project B
C. Project C
D. Project D
1) One common way to compute estimate at
completion (EAC) is to take the budget at
completion (BAC) and:
A. Divide by SPI.
B. Multiply by SPI.
C. Multiply by CPI.
D. Divide by CPI.

Answer: D

2) Estimate at completion (EAC) is a periodic


evaluation of:
A. The cost of work completed.
B. The value of work performed.
C. The anticipated total cost at project
completion.
D. What it will cost to finish the job.

Answer: C
3) If earned value (EV) = 350, actual cost (AC) =
400, planned value (PV) = 325, what is cost
variance (CV)?
A. 50
B. -75
C. 400
D. -50

Answer: D

4) Which of the following is NOT needed in


order to come up with a project estimate?
A. A WBS
B. A network diagram
C. Risks
D. A change control system

Answer: D
5) Which of the following is an example of a
parametric estimate?
A. Dollars per module
B. Learning bend
C. Bottom-up
D. CPM

Answer: A

6) Which type of cost is team training?


A. Direct
B. NPV
C. Indirect
D. Fixed

Answer: A
7) Project setup costs are an example of:
A. Variable costs.
B. Fixed costs.
C. Overhead costs.
D. Opportunity costs.

Answer: B

8) Earned value analysis an example of:


A. Performance reporting.
B. Planning control.
C. Ishikawa diagrams.
D. Integrating the project components into a
whole.

Answer: A
9) The difference between the cost baseline and
the cost budget can be BEST described as:
A. The Contingency reserve.
B. The Management reserve.
C. The project cost estimate.
D. The cost account.

Answer: A

10)Who has the cost risk in a fixed price (FP)


contract?
A. The team
B. The buyer
C. The seller
D. Management

Answer: C

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