CAPM Time & Cost Management 3 — Questions and Answers
Question 1: A project has a Planned Value (PV) of $50,000, Earned Value (EV) of $45,000, and Actual Cost (AC) of $42,000. What is the Cost Variance (CV)?
- -$5,000
- $3,000 (Correct answer)
- -$3,000
- $5,000
Correct answer: $3,000
CV = EV - AC = $45,000 - $42,000 = $3,000, indicating the project is under budget.
Question 2: What is the purpose of a resource histogram in project time management?
- To show the critical path of the project
- To display resource usage over time periods (Correct answer)
- To compare planned vs. actual costs
- To document activity dependencies
Correct answer: To display resource usage over time periods
A resource histogram is a bar chart that shows the amount of time a resource is scheduled to work over a series of time periods.
Question 3: What does 'free float' (free slack) mean in schedule network analysis?
- The amount of time a project can be delayed without delaying the project end date
- The time an activity can be delayed without delaying the early start of its successor (Correct answer)
- The total time a project schedule can slip
- Extra budget reserved for schedule risks
Correct answer: The time an activity can be delayed without delaying the early start of its successor
Free float is the amount of time an activity can be delayed without impacting the earliest start of any successor activity.
Question 4: Which process involves identifying the sequence of activities that represents the longest path through the schedule network?
- Define Activities
- Develop Schedule (Correct answer)
- Sequence Activities
- Determine Critical Path
Correct answer: Develop Schedule
Develop Schedule integrates all schedule inputs including the critical path analysis to produce the project schedule.
Question 5: A project manager uses parametric estimating. The historical rate is $500 per unit and the project requires 200 units. What is the cost estimate?
- $50,000
- $100,000 (Correct answer)
- $150,000
- $200,000
Correct answer: $100,000
Parametric estimating multiplies the unit rate by the quantity: $500 × 200 = $100,000.
Question 6: What is the Estimate to Complete (ETC) when using the typical EAC formula and assuming future work will be performed at the budgeted rate?
- BAC - EV (Correct answer)
- BAC / CPI
- AC + (BAC - EV)
- EV / AC
Correct answer: BAC - EV
ETC = BAC - EV when future work is assumed to proceed at the planned (budgeted) rate, regardless of past performance.
Question 7: Which scheduling output document shows the planned start and finish dates for each project activity?
- Work Breakdown Structure
- Project Schedule (Correct answer)
- Responsibility Assignment Matrix
- Risk Register
Correct answer: Project Schedule
The project schedule, often displayed as a Gantt chart, shows planned start and finish dates for all scheduled activities.
CAPM Time & Cost Management 3
A project has a Planned Value (PV) of $50,000, Earned Value (EV) of $45,000, and Actual Cost (AC) of $42,000.
What is the Cost Variance (CV)?