Practice Test Geeks(PMI) Project Management Institute Certified Practice Test
← All PMI Flashcard Decks

Project Budgeting & Financial Control Flashcards

7 cards from real PMI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Project Budgeting & Financial Control flashcards as text

  1. A project manager discovers that control account costs have exceeded their budgets by 12%. What is the FIRST action the PM should take?

    Answer: Investigate the root cause of the cost overrun

    Before taking corrective action, the PM must understand why the overrun occurred to select the most appropriate response.

  2. Which financial metric measures the ratio of benefits to costs and is used to evaluate project selection?

    Answer: Benefit-Cost Ratio (BCR)

    The Benefit-Cost Ratio (BCR) divides total expected benefits by total costs; a BCR > 1 indicates the project is financially worthwhile.

  3. A project manager is tracking cost performance using S-curves. What do S-curves primarily represent?

    Answer: Cumulative costs or resource usage plotted over time

    S-curves display cumulative costs (or resources) over time, showing the characteristic slow start, rapid middle growth, and tapering at completion.

  4. Which term describes costs that remain constant regardless of the amount of work performed on a project?

    Answer: Fixed costs

    Fixed costs (e.g., equipment leases, permits) do not change with project activity levels or output volume.

  5. A PM uses three-point estimating for a cost estimate. The optimistic estimate is $80K, most likely is $100K, and pessimistic is $150K. What is the triangular distribution mean?

    Answer: $108,333

    Triangular mean = (O + M + P) / 3 = ($80K + $100K + $150K) / 3 = $330K / 3 = $110,000.

  6. When is a cost change request NOT required to update the cost baseline?

    Answer: When a previously identified risk event occurs and contingency reserve is used

    Using pre-approved contingency reserve to cover identified risk events does not require a formal change request to update the baseline.

  7. A project manager wants to express project financial performance in a single integrated metric. Which combination BEST captures both cost and schedule efficiency?

    Answer: CPI and SPI reviewed together

    CPI (cost efficiency) and SPI (schedule efficiency) together provide a comprehensive view of both cost and schedule performance.