PGM Financial Management 3

Question 1

Which benefit of earned value management (EVM) makes it especially valuable for program-level financial oversight compared to simple budget tracking?

Accepted Answer

It integrates scope, schedule, and cost to provide an objective performance measurement

Answer

It eliminates the need for a program charter

Answer

It allows program managers to bypass governance review for minor variances

Answer

It automatically generates updated cost forecasts without manual input

Question 2

A program sponsor asks the program manager to explain the difference between the program's funding limit and its budget baseline. Which statement is MOST accurate?

Accepted Answer

The funding limit is the total funds available; the baseline reflects the time-phased spending plan

Answer

They are identical because all approved funds constitute the baseline

Answer

The baseline is always higher than the funding limit to account for contingencies

Answer

Funding limits apply only to vendor contracts, not internal program costs

Question 3

What is the purpose of a 'should-cost' analysis in program financial management?

Accepted Answer

To estimate what a product or service should cost based on independent analysis, used to validate vendor proposals

Answer

To determine the actual costs incurred by vendors in prior contracts

Answer

To calculate the minimum acceptable profit margin for the organization

Answer

To reconcile discrepancies between the program budget and the accounting system

Question 4

Under the Standard for Program Management, who typically holds ultimate authority over the program's management reserve?

Accepted Answer

The program sponsor or governance board

Answer

The program manager

Answer

The individual project managers within the program

Answer

The organization's finance department

Question 5

A program is experiencing consistent cost overruns due to scope growth from multiple approved change requests. Which corrective action BEST addresses the root cause?

Accepted Answer

Re-baseline the cost performance baseline to reflect the approved scope changes

Answer

Transfer funds from the management reserve to cover the overruns

Answer

Reduce team member hours to offset the additional costs

Answer

Report the variances as acceptable without updating the baseline

Question 6

What does the 'To-Complete Performance Index' (TCPI) measure in program financial management?

Accepted Answer

The cost efficiency required for the remaining work to meet the budget at completion

Answer

The ratio of earned value to planned value at program completion

Answer

The percentage of the total budget that has been earned to date

Answer

The schedule efficiency needed to complete the program on time

Question 7

A program manager is conducting a financial benefits review six months after a program closes. This activity is BEST described as part of which program management process?

Accepted Answer

Benefits transition and sustainment

Answer

Program closure planning

Answer

Post-program financial audit

Answer

Component transition management