Program Management Professional Program Financial Management 3

Question 1

What does a Schedule Performance Index (SPI) greater than 1.0 indicate?

Accepted Answer

The program is ahead of schedule — more work has been accomplished than planned

Answer

An SPI greater than 1.0 means the value of work completed exceeds the value of work planned — the program is performing ahead of the planned schedule.

Question 2

The Estimate to Complete (ETC) in EVM represents:

Accepted Answer

The expected cost to finish the remaining program work from the current point

Answer

ETC is a forward-looking estimate of what it will cost to complete the remaining work, based on current performance trends.

Question 3

Which financial document presents the total cost of program ownership including operations and maintenance costs after program delivery?

Accepted Answer

Life Cycle Cost Analysis

Answer

Life Cycle Cost Analysis captures all costs from initiation through disposal or ongoing operations, providing a complete view of total ownership costs.

Question 4

When component project budgets are allocated from the program budget, which principle should guide allocation decisions?

Accepted Answer

Alignment of budget allocation with each component's contribution to program benefits and objectives

Answer

Budget allocation should reflect each component's strategic importance and contribution to program benefits, not arbitrary factors like duration or equal distribution.

Question 5

A program sponsor requests a financial forecast update. The program manager should base this forecast primarily on:

Accepted Answer

Current cost performance trends, remaining work scope, and known risks

Answer

Accurate forecasts must incorporate current cost performance trends, realistic remaining work estimates, and known risk impacts to produce a credible financial outlook.

Program Management Professional Practice Test

Program Management Professional Practice Test

Program Management Professional Program Financial Management 3