Program Financial Management Flashcards
6 cards from real Program Management Professional practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Program Financial Management flashcards as text
What is a program budget baseline used for in PgMP?
Answer: To serve as the approved reference point against which actual program expenditures are measured
The program budget baseline is the approved financial plan used to measure, monitor, and control actual costs throughout the program lifecycle.
Earned Value Management (EVM) in program management uses which three core values to measure performance?
Answer: Planned Value (PV), Earned Value (EV), and Actual Cost (AC)
EVM tracks Planned Value (what was planned to be done), Earned Value (the value of work actually completed), and Actual Cost (what was actually spent).
A Cost Performance Index (CPI) of 0.85 in a program indicates:
Answer: The program is spending $1.00 for every $0.85 of value delivered — over budget
A CPI below 1.0 means the program is over budget, with $1.00 being spent for every $0.85 of earned value delivered.
Which financial document provides a long-range view of program expenditures mapped to the program timeline?
Answer: Program Budget Forecast
The Program Budget Forecast maps expected expenditures to the program timeline, providing visibility into when funds will be needed across the program lifecycle.
What is 'management reserve' in the context of program financial management?
Answer: An amount held by management for unplanned, unknown risks outside the program scope baseline
Management reserve is withheld by management to address unknown risks (unknown unknowns) and requires management approval to access.
Which financial metric best measures the overall value an investment will generate over a program's lifetime, adjusted for the time value of money?
Answer: Net Present Value (NPV)
NPV calculates the present value of all future cash flows minus initial investment, accounting for the time value of money to determine overall investment value.
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