# Learn and Practice Free Cost Management Set 6 questions

## You can get answer of the below sample questions by going through the above Question sets.

#### In your project, two dependent tasks have 3 days lag time. If the relationship between them is finish- to-start, the successor task may start:

Option 1: 3 days after the predecessor task is scheduled to start
Option 2: 3 days before the predecessor task is scheduled to start
Option 3: 3 days before the predecessor task is scheduled to finish
Option 4: 3 days after the predecessor task is scheduled to finish
Option 5:

#### While analyzing a project, the project manager calculated the ratio of the Earned Value (EV) to the Actual Costs (AC) and obtained a value of 1.2. The project manager decided that this was an unfavorable condition to the project and decided to take corrective action. What is your view?

Option 1: The project manager is correct. The ratio of EV to AC is called Cost Performance Index and a ratio greater than 1 is unfavorable to the project
Option 2: The project manager is not correct. The ratio of EV to AC is called Cost Pricing Index and a ratio greater than 1 is favorable to the project.
Option 3: The project manager is not correct. The ratio of EV to AC is called Cost Performance Index and a ratio greater than 1 is favorable to the project
Option 4: The project manager is correct. The ratio of EV to AC is called Cost Pricing Index and a ratio greater than 1 is unfavorable to the project
Option 5:

#### Smell is a company which specializes in computer sales, computer systems and network installation, computer systems support and IT training. Smell is working with a company called MicroHard, to help decide which computer systems and networks to invest in. Smell has provided the executive, Bill Doors from MicroHard, with three possible solutions for this project. Bill Doors will use NPV as one selection method to determine which solution to choose. Solution A will have an initial investment of \$1,700,000 with a total projected cash flow of \$2,900,000 over 5 years. Solution B will have an initial investment of \$3,500,000 with a total projected cash flow of \$2,700,000 over 5 years. Solution C will have an initial investment of \$6,500,000 with a total projected cash flow of \$6,000,000 over 5 years. The total projected cash flow for each of the three projects is adjusted with a 7% interest rate over 5 years. If Bill Doors at MicroHard used NPV as the only selection method for choosing the solution, which solution would be the BEST choice?

Option 1: Solution C with an NPV of (\$500,000)
Option 2: Solution B with an NPV of \$800,000
Option 3: Solution B with an NPV of \$6,200,000
Option 4: Solution A with an NPV of \$1,200,000
Option 5:

#### You are the project manager for Wicked Fast Cars, Corp. You are working on a project for the Human Resources department that is scheduled to take one year. After three months into the project, you calculate the EV at \$35,000 and the PV at \$45,000. Which option below represents the value for the SV?

Option 1: (\$10,000)
Option 2: \$90,000
Option 3: 0.78
Option 4: \$10,000
Option 5:

#### Which of the following activities fall under the planning process group but not under the project time management?

Option 1: Estimating the type of materials and equipment needed to perform project activities
Option 2: Formalizing the acceptance of completed deliverables
Option 3: Identification of various activities to produce the project deliverables
Option 4: Developing a detailed description of the project and product being developed
Option 5:

#### James has been managing a hotel construction project in a busy street. He is in the process of estimating activity durations for building walls and calculates the most likely estimate as 15 days. If pre-fabricated material is used, it would take no more than 12 days to finish the work. However, the work may be delayed and could take up to 18 days if less experienced construction workers are used to build the walls. But, the engineer in- charge of the work estimates the duration as 8 days when prefabricated material is used. What is the expected duration of building walls using the three-point estimate, if the engineer's estimation is assumed correct?

Option 1: 12 days
Option 2: 11 days
Option 3: 15 days
Option 4: 14 days
Option 5:

#### Rodney is in the process of preparing the project performance report for the team meeting. He is expecting many questions from his stakeholders on the budget and schedule. He calculates the following values; Budget at Completion (BAC) = \$22,000, Earned Value (EV) = \$13000, Planned Value (PV) = \$ 14000, Actual cost (AC) = \$15000. What is the Estimate at Completion (EAC) for the project if the work is performed at the budgeted rate?

Option 1: \$24,000
Option 2: \$36,000
Option 3: \$22,500
Option 4: \$37,000
Option 5:

#### Which document describes the project's deliverables and the work required to create those deliverables?

Option 1: Project authorization document
Option 2: Project scope statement
Option 3: Project scope management plan
Option 4: Project charter
Option 5:

#### What does a Cost Performance Index (CPI) of more than 1.0 indicate?

Option 1: The project is over budget.
Option 2: The project is right on budget.
Option 3: The project is under budget.
Option 4: The project is ahead of schedule.
Option 5:

#### What is the advantage of preparing an estimate of costs by an outside professional estimator?

Option 1: To determine if a lump sum contract should be used
Option 2: To determine the project funding limits
Option 3: To hold vendors accountable to a certain price
Option 4: To serve as a comparison point for incoming estimates
Option 5:

#### You are the project manager for JT's Lumber Yard. You are trying to forecast estimates for the last phase of the project you are currently working on. Based on the performance of the project to date, which formula can be used to estimate the total value of the project when completed assuming similar variances will not occur?

Option 1: ETC = (BAC - EV)/CPI
Option 2: SV = EV - PV
Option 3: CPI = EV/AC
Option 4: EAC = AC + BAC - EV
Option 5:

#### What is the BEST tool and technique that shows the intended cost of a project and helps identify significant variations from cost estimates?

Option 1: Screening system
Option 2: Bidder conferences
Option 3: Independent estimates
Option 5:

#### Analogous Estimating is an estimation technique that use the values of parameters such as scope, cost, budget and duration from a previous similar activity as the basis of activity and is frequently used to estimate when there is a limited amount of information about the project. This is a form of:

Option 1: Expert Judgment
Option 2: Function point estimation
Option 3: Fixed point estimation
Option 4: Precision Estimation
Option 5:

#### A project was estimated to cost \$ 200,000 with a timeline of 10 months. Due to a shipment delay, the schedule was slightly delayed. This was however made up by receiving the first batch of materials for the project by air. The net result was that there was some additional cost in the project. At the end of the second month, the project manager reviews the project and finds that the project is 20% complete and Actual Costs are \$ 50,000. The Estimate to complete (ETC) for the project would now be:

Option 1: \$160,000
Option 2: \$210,000
Option 3: \$250,000
Option 4: \$200,000
Option 5:

#### Many organizations favor fixed-price contracts because the performance of the project is the responsibility of the seller. Which of the following is the characteristic of a firm fixed price contract?

Option 1: The buyer must precisely specify the number of resources to be used for procurement
Option 2: The buyer must precisely specify the service or product to be procured
Option 3: The buyer must precisely specify the time for completing the contract
Option 4: The buyer must precisely specify the price of the contract
Option 5:

Practice Free Cost Management Set 6 Questions online

By Practicing the below question set :
The student will get the basic and advanced knowledge on Cost Management Set 6.
The student will learned the priciples and methedology of Cost Management Set 6.
The student will evaluate the knowledge level on Cost Management Set 6.
Student can practice number of times the question till he is clear.
Student can provide the review / feedback / suggestion on the questions which will help to others.
The question contains the simple to complex level difficulties so that student can improve the knowledge.