PMI Project Budgeting & Financial Control 3

Question 1

A project's Schedule Variance (SV) is −$20,000 and Cost Variance (CV) is +$15,000. Which statement BEST describes the project status?

Accepted Answer

Behind schedule but under budget

Answer

Negative SV means behind schedule; positive CV means under budget (earning more value than spent).

Question 2

Which document formally authorizes the project budget and establishes the cost baseline?

Accepted Answer

Approved cost baseline

Answer

The approved cost baseline is the time-phased budget used to measure, monitor, and control project cost performance.

Question 3

A PM is using the To-Complete Performance Index (TCPI) and gets a result of 1.20. What does this mean?

Accepted Answer

The project must earn $1.20 in value for every $1 of remaining budget

Answer

TCPI > 1.0 means remaining work must be performed more efficiently than past performance to meet the budget goal.

Question 4

During the planning phase, which technique breaks the project into smaller components to improve the accuracy of cost estimates?

Accepted Answer

Bottom-up estimating

Answer

Bottom-up estimating decomposes work packages into smaller components and aggregates their estimates for higher accuracy.

Question 5

A project manager compares the planned value to actual costs each month. This is an example of which activity?

Accepted Answer

Variance analysis

Answer

Variance analysis compares actual project performance (cost, schedule) against the plan to identify deviations.

(PMI) Project Management Institute Certified Practice Test