CAPM Cost Management 5

Question 1

A project manager notices the CPI has been consistently 0.80 for the past three reporting periods. Using the EAC = BAC / CPI formula, what assumption is being made?

Accepted Answer

Current efficiency will continue throughout the project

Answer

EAC = BAC / CPI assumes current cost efficiency (CPI) will persist for all remaining work on the project.

Question 2

What is the formula for Variance at Completion (VAC)?

Accepted Answer

VAC = BAC - EAC

Answer

VAC = BAC - EAC; a positive VAC indicates the project will finish under budget, while negative means over budget.

Question 3

In the cost management plan, the level of precision refers to:

Accepted Answer

The rounding rules applied to cost estimates

Answer

Level of precision defines the rounding convention for activity cost estimates, such as rounding to the nearest dollar or thousand.

Question 4

A project manager is asked to provide a rough order of magnitude (ROM) estimate. What accuracy range is typically associated with ROM estimates?

Accepted Answer

-25% to +75%

Answer

ROM estimates typically have an accuracy range of -25% to +75%, as they are prepared early with limited information.

Question 5

Which document formally authorizes the project manager to apply organizational resources and includes a summary-level budget?

Accepted Answer

Project charter

Answer

The project charter authorizes the project, names the project manager, and includes a summary budget.

CAPM Practice Test

CAPM Practice Test

CAPM Cost Management 5