Program Management Professional Program Financial Management 2

Question 1

When a program's Estimate at Completion (EAC) significantly exceeds the original Budget at Completion (BAC), the program manager should:

Accepted Answer

Analyze cost drivers, implement corrective actions, and communicate the revised forecast to stakeholders

Answer

Ignore the variance and proceed without action

Answer

Immediately terminate the program

Answer

Request additional budget without analysis

Question 2

Program financial reporting to executives should typically focus on:

Accepted Answer

High-level cost performance, forecast accuracy, and key financial decisions needed

Answer

Detailed line-item expenditures for every work package

Answer

Raw accounting data without context or analysis

Answer

Individual contractor invoices

Question 3

In program financial management, 'funding authorization' refers to:

Accepted Answer

The formal approval of program funds aligned to program phases or milestones

Answer

Approving individual expense reports

Answer

The process of hiring financial controllers

Answer

Generating purchase orders for equipment

Question 4

Cost aggregation in program management means:

Accepted Answer

Rolling up individual project costs to create a total program cost view

Answer

Averaging costs across all component projects

Answer

Eliminating cost variances across components

Answer

Allocating a single budget to all components equally

Question 5

A program manager discovers a component project is significantly over budget. What is the appropriate program-level response?

Accepted Answer

Assess the impact on the program budget baseline and benefits, then decide on corrective action or re-forecasting

Answer

Take no action as it is solely the project manager's responsibility

Answer

Immediately cancel the component project

Answer

Transfer the excess cost to another component's budget without analysis

Question 6

Which financial technique is used to compare the financial benefits of a program against its costs to determine if it is worth pursuing?

Accepted Answer

Benefit-Cost Analysis (BCA)

Answer

Critical Path Analysis

Answer

Earned Value Management

Answer

Monte Carlo Simulation