Financial Management for Project Managers Cheat Sheet 2026

The 30 highest-yield Financial Management for Project Managers facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. Which EVM reporting document summarizes cost and schedule performance metrics at all levels of the WBS for management review? → Cost Performance Report (CPR)
2. A project reports EBIT of $80,000 and interest expense of $20,000. What is the interest coverage ratio? → 4.0
3. When calculating net cash flow for a project period, which formula is correct? → Net Cash Flow = Cash Inflows − Cash Outflows
4. Which technique allows a project team to reduce cash outflows without reducing project scope or quality? → Negotiating extended payment terms with vendors
5. Which of the following is a need for the examination of product profitability? → Accurate revenue and expense data
6. In project financial management, what is a retainage clause in accounts receivable? → A percentage of each payment withheld until project completion as a performance guarantee
7. Gross profit on an income statement is calculated as: → Net sales minus cost of goods sold
8. A project manager is computing a project's break-even point. Which variable is NOT needed for this calculation? → Net Present Value
9. Which of the following is not a prerequisite for a risk that can, in theory, be insured? → losses should be catastrophic in nature
10. Which financial planning practice helps a project manager identify the point at which cumulative project costs will be recovered by cumulative project revenues? → Break-even analysis
11. Which is "Waste in relation to material cost?" → Smoke
12. When a project manager applies the 'weighted milestone' EVM technique, Earned Value is credited: → At defined milestones according to pre-assigned budget weights
13. A project budget at completion (BAC) is $200,000. The project is 40% complete. What is the Planned Value (PV) if the project is on schedule? → $80,000
14. A project manager is calculating working capital. Which of the following correctly describes the relationship between AP and working capital? → Increasing AP decreases working capital because it raises current liabilities
15. On the balance sheet, retained earnings represent: → Cumulative net income kept in the business after dividends
16. Which capital budgeting technique calculates the time required for cumulative project cash inflows to equal the initial investment? → Payback Period
17. An incremental cash flow in capital budgeting refers to: → Cash flows that occur only if the project is undertaken
18. Which system assigns numeric or mnomenic codes to parts? → Symbolic
19. In decision tree analysis, the 'decision node' (square) represents: → A choice the project team must make among alternatives
20. What can you say about residual income? → The amount of money left over after a person's monthly bills are paid.
21. Real options in capital budgeting give project managers the right to: → Expand, delay, or abandon a project based on future information
22. In relation to "Spoilage," which of the following accounting treatments is correct? → All of these.
23. Bottom-up cost estimating involves: → Estimating costs at the work package level and summing them up
24. indicates the amount that customers owe to a business as a result of buying products or services. → accounts receivable
25. When a project manager establishes a 'watch list,' it typically contains risks that: → Have low priority ratings and need periodic monitoring but no active response
26. Business investor funds are an example. → cash inflow
27. A project has total debt of $400,000 and total equity of $600,000. How is this debt-to-equity ratio best interpreted? → The project is conservatively financed with more equity than debt
28. Planned Value (PV) in EVM represents: → The budgeted cost of work scheduled to be done by a specific point in time
29. Which financial ratio is most relevant when a project manager needs to evaluate long-term financial stability rather than short-term liquidity? → Debt-to-equity ratio
30. Life cycle costing in project financial management considers: → Total costs including acquisition, operation, maintenance, and disposal