PGM Financial Management 1

Question 1

A program manager is preparing the program budget. Which budgeting approach starts from a zero base and requires justification for every expenditure, rather than adjusting the prior year's budget?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting requires each budget cycle to start from scratch, justifying every expense regardless of historical spending patterns.

Question 2

Which financial metric measures the value of work actually completed in a program relative to the planned value at a given point in time?

Accepted Answer

Earned Value (EV)

Answer

Earned Value (EV) represents the authorized budget assigned to the work that has actually been accomplished, providing the basis for schedule and cost performance analysis.

Question 3

A program's Cost Performance Index (CPI) is 0.85. What does this indicate?

Accepted Answer

The program is getting $0.85 of value for every $1.00 spent

Answer

A CPI of 0.85 means the program is over budget, receiving only $0.85 of planned value for each $1.00 of actual expenditure.

Question 4

What is the primary purpose of a Program Financial Plan?

Accepted Answer

To document funding sources, budget allocations, and financial controls for the program

Answer

A Program Financial Plan defines how the program will be funded, how budgets are allocated across components, and the financial controls that will be used to manage expenditures.

Question 5

Which term describes the total approved budget for a program, including management reserves but excluding contingency reserves held at the project level?

Accepted Answer

Total Allocated Budget (TAB)

Answer

The Total Allocated Budget (TAB) represents the sum of all budgets allocated to a program, including management reserve but distinct from the performance measurement baseline.

(PGM) Program Manager Practice Test

(PGM) Program Manager Practice Test

PGM Financial Management 1