6. Budgeting

What is the primary purpose of project budgeting in project management?

• To estimate the duration of a project

• To allocate resources to project tasks

• To assess the feasibility of the project

• To evaluate the project's return on investment

Which of the following is a key component of a project budget?

• Project objectives

• Risk assessment

• Project schedule

• Cost estimates

What is the role of a cost-benefit analysis in project management?

• To create a detailed project schedule

• To assess the impact of project risks

• To evaluate whether a project is financially viable

• To allocate resources to project tasks

Which cost estimation technique relies on historical data and benchmarks to estimate project costs?

• Expert judgment

• Analogous estimation

• Parametric estimation

• Three-point estimation

In a cost-benefit analysis, what is the net present value (NPV) of a project if it is negative?

• The project is financially viable.

• The project is not financially viable.

• The project is on schedule.

• The project is under budget.

What does the payback period represent in a cost-benefit analysis?

• The time it takes to complete the project

• The time it takes for the project to cover its initial investment

• The project's total budget

• The project's scope and objectives

In project budgeting, what is the purpose of a contingency reserve?

• To allocate additional resources to project tasks

• To mitigate identified risks that may impact project costs

• To cover known risks that have already occurred

• To assess the project's return on investment

Which financial metric in a cost-benefit analysis represents the ratio of net benefits to the initial investment?

• Net Present Value (NPV)

• Return on Investment (ROI)

• Benefit-Cost Ratio (BCR)

• Payback Period