PCC Financial Management & Pricing Strategies 2

Question 1

A consultant calculates that a project requires 200 hours at $125/hour. What is the break-even billing amount before any profit margin?

Accepted Answer

$25,000

Answer

$15,000

Answer

$20,000

Answer

$22,500

Question 2

Which metric best measures the financial efficiency of a consulting engagement by comparing revenue generated to consultant time invested?

Accepted Answer

Revenue per billable hour

Answer

Net Promoter Score

Answer

Utilization rate

Answer

Client acquisition cost

Question 3

Scope creep in a consulting engagement most directly threatens which financial outcome?

Accepted Answer

Project profitability

Answer

Client satisfaction scores

Answer

Consultant utilization targets

Answer

Proposal win rate

Question 4

A contingency fee arrangement in consulting means the consultant is paid:

Accepted Answer

Only if a specific result or milestone is achieved

Answer

A flat fee regardless of outcome

Answer

Based on hours worked multiplied by an agreed rate

Answer

A percentage of client revenues annually

Question 5

What is the most appropriate action when a consulting firm's actual project costs are tracking 15% over the approved budget midway through the engagement?

Accepted Answer

Immediately notify the client and present corrective options

Answer

Continue without disclosure and reduce quality to save costs

Answer

Bill the client the full overrun without prior discussion

Answer

Terminate the engagement to limit losses

Question 6

Which payment term is most favorable for a consultant's cash flow?

Accepted Answer

50% upfront with balance on completion

Answer

Net 90 days

Answer

Payment upon project completion

Answer

Net 60 days

Question 7

Return on Investment (ROI) for a consulting engagement is best calculated as:

Accepted Answer

((Value Delivered - Consulting Fees) / Consulting Fees) × 100

Answer

(Project Cost / Client Revenue) × 100

Answer

(Consulting Fees / Hours Worked) × 100

Answer

(Client Revenue / Project Duration) × 100