IPM - Chapter 7 (Cost Management)

1.Early in the project’s planning phase, the project team determined that the cost to install the server would be $15,000. This is a high-level estimate, and the team thinks it may cost up to $10,000 more.

What kind of estimate is this?

• A. Definitive estimate

• B. Rough order of magnitude estimate

• C. Wide Estimate

• D. Plan Estimate

6. You are managing a hotel construction project, and you have asked your project team to calculate the current earnedvalue metrics to determine the project performance. Your team reports back that the project's to-complete performanceindex (TCPI) is 0.9 based on the budget at completion (BAC).

Which of the following is true regarding your project's current situation as reflected by this TCPI value?

• A. The project is within budget

• B. The project is over budget

• C. The project is behind schedule

• D. The project is ahead of schedule

If Earned Value (EV) = 350, Actual Cost (AC) = 400, Planned Value (PV) = 325, what is Cost Variance (CV)?

• 350

• - 75

• 400

• -50

You are a project manager working on a project that requires 100 items to be tested, spaced evenly over five weeks. you have just begun week three, with an overall budget of $10,000 to date, you have spent $2,000 with 40 items tested successfully. What does the cost variance (CV) tell you in this circumstance?

• The project is proceeding at 100% of the expected rate.

• The project is $2000 under budget.

• The project is on budget.

• The project is getting $2 of work for every dollar spent.

You are managing a project which is into six months of its execution. You are now reviewing the project status and you have ascertained that project is behind schedule. The actual cost of Activity A is $200,000 and that of Activity B is $100,000. The planned value of these activities are $180,000 and $80,000 respectively. The Activity A is 100% complete. However, Activity B is only 75% complete. Calculate the cost performance index of the project on the review date.

• 0.7

• 0.8

• 0.9

• 0.6

A project is estimated to cost $ 50,000 with a timeline of 50 days. After 25 days, the project manager finds that 50% of the project is complete and Actual costs are $ 50,000. What is the Cost Performance Index (CPI) ?

• The CPI is 1
• The CPI is 1.5
• The CPI is 0.5
• The CPI is 2

The estimate at completion (EAC) is typically based on:

• The actual costs incurred for work completed (AC), and the estimate to complete (ETC) the remaining work.

• The actual costs incurred for work completed (AC) and the cumulative cost performance index (CPI).

• The earned value (EV) and the actual cost for work completed (AC).

• The cost performance index (CPI) and the cost variance (CV).

Your earned value management analysis indicates that your project is falling behind its baseline schedule. You know this because the cumulative EV is much:

• Higher than the cumulative AC.

• Higher than the cumulative PV.

• Lower than the cumulative PV.

• Lower than the cumulative CPI.

Which of the following cumulative measures indicates that your project is about 9% under budget?

• The cumulative AC was 100, and the cumulative EV was 110.

• The cumulative PV was 100, and the cumulative AC was 110.

• The cumulative AC was 110, and the cumulative EV was 100.

• The cumulative EV was 100, and the cumulative PV was 110.

During the sixth monthly update on a 10-month, $300,000 project, analysis of the earned value management data shows that the cumulative PV is $190,000, the cumulative AC is $120,000, and the cumulative EV is $150,000. In planning its action, the project management team can conclude all of the following from these measures, EXCEPT:

• Less has been accomplished than was planned.

• Less has been spent than was planned.

• Continuing performance at the same efficiency with no management intervention, the project will probably be completed behind schedule and under budget.

• Continuing performance at the same efficiency with no management intervention, the project will probably be completed ahead of schedule and over budget.