PSI - Exams Project and Financial Management Questions and Answers

Question 1

A project has a budget at completion (BAC) of $150,000.
At the current time, the earned value (EV) is $75,000, the planned value (PV) is $80,000, and the actual cost (AC) is $90,000.
What is the Cost Performance Index (CPI) for this project?

Accepted Answer

0.83

Answer

1.20

Answer

0.94

Answer

1.07

Question 2

A project manager is developing the budget and needs to account for potential risks that could impact costs. Which of the following is the BEST tool for allocating funds to cover these unforeseen events?

Accepted Answer

Contingency Reserve

Answer

Management Reserve

Answer

Parametric Estimating

Answer

Bottom-Up Estimating

Question 3

During the execution phase of a construction project, the project manager notices that the cost of raw materials has unexpectedly increased by 15%, leading to a significant budget deviation. Which of the following processes is the project manager actively engaged in?

Accepted Answer

Control Costs

Answer

Cost Budgeting

Answer

Cost Estimating

Answer

Determine Budget

Question 4

Which of the following financial metrics is used to determine the efficiency of a project's schedule performance by comparing the value of work completed to the value of work planned?

Accepted Answer

Schedule Performance Index (SPI)

Answer

Cost Variance (CV)

Answer

Return on Investment (ROI)

Answer

Cost Performance Index (CPI)

Question 5

A project's initial budget (BAC) is $500,000. The project is currently performing with a Cost Performance Index (CPI) of 0.95. Assuming the current cost performance will continue for the remainder of the project, what is the most likely Estimate at Completion (EAC)?

Accepted Answer

$526,316

Answer

$475,000

Answer

$500,000

Answer

$550,000

Question 6

In project financial management, what is the primary purpose of conducting a variance analysis?

Accepted Answer

To determine the root cause of deviations from the cost baseline and inform corrective actions.

Answer

To secure initial project funding from stakeholders.

Answer

To calculate the final return on investment (ROI) at project closure.

Answer

To select the most qualified vendors through a competitive bidding process.

A project has a budget at completion (BAC) of $150,000.At the current time, the earned value (EV) is $75,000, the planned value (PV) is $80,000, and the actual cost (AC) is $90,000.What is the Cost Performance Index (CPI) for this project?

A project has a budget at completion (BAC) of $150,000.
At the current time, the earned value (EV) is $75,000, the planned value (PV) is $80,000, and the actual cost (AC) is $90,000.
What is the Cost Performance Index (CPI) for this project?