Project Management Project Cost Management 2

Question 1

A project has a Budget at Completion (BAC) of $200,000, Earned Value (EV) of $80,000, and Actual Cost (AC) of $100,000. What is the Cost Performance Index (CPI)?

Accepted Answer

0.80

Answer

CPI = EV / AC = $80,000 / $100,000 = 0.80, meaning only $0.80 of value is earned for every $1 spent.

Question 2

Which cost estimating technique relies on statistical relationships between historical data and project variables?

Accepted Answer

Parametric estimating

Answer

Parametric estimating uses statistical relationships between historical data and variables like cost per unit or hours per line of code.

Question 3

What does a Schedule Performance Index (SPI) of 1.15 indicate?

Accepted Answer

The project is ahead of schedule

Answer

SPI > 1.0 means more work has been accomplished than planned, so the project is ahead of schedule.

Question 4

A project manager is calculating the Estimate to Complete (ETC) assuming future work will be performed at the planned rate. Which formula applies?

Accepted Answer

ETC = BAC - EV

Answer

When assuming future work proceeds at the budgeted rate, ETC = BAC - EV (remaining budget minus work already earned).

Question 5

Which process in Project Cost Management establishes how project costs will be estimated, budgeted, managed, monitored, and controlled?

Accepted Answer

Plan Cost Management

Answer

Plan Cost Management is the process that establishes the policies and procedures for planning, managing, and controlling project costs.

Project Management Practice Test

Project Management Practice Test

Project Management Project Cost Management 2