Specialized Certifications Specialized Certifications Financial Management & Budgeting 2

Question 1

What does the Schedule Performance Index (SPI) measure?

Accepted Answer

Efficiency of time utilization on the project

Answer

SPI equals Earned Value divided by Planned Value, measuring how efficiently the project is using its scheduled time.

Question 2

Life-cycle costing in specialized certifications refers to considering costs over:

Accepted Answer

The entire useful life of the deliverable

Answer

Life-cycle costing accounts for all costs from initiation through disposal, not just project delivery costs.

Question 3

What is the Estimate at Completion (EAC) formula when current variances are expected to continue?

Accepted Answer

BAC / CPI

Answer

When current cost performance is expected to continue, EAC equals Budget at Completion divided by the Cost Performance Index.

Question 4

Which procurement contract type places the most financial risk on the buyer?

Accepted Answer

Cost-plus-fixed-fee (CPFF)

Answer

In CPFF contracts, the buyer reimburses all allowable costs plus a fixed fee, bearing the risk if costs escalate.

Question 5

A budget variance (BV) of -$10,000 means:

Accepted Answer

The project has spent $10,000 more than earned

Answer

A negative budget variance (EV - AC) means actual costs exceed earned value, signaling cost overrun.

Specialized Certifications Practice Test