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Glossary of PMP - test

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198. _________ Contains detailed descriptions of work packages? a. WBS dictionaries b. Scope of work c. Budget estimates d. Cost estimates
Answer: a
1. The relationship between the budgeted actual cost, actual work completed and work planned will determine the
A. Schedule estimate at completion
B. Cost estimate at completion
C. Cost Performance Index
D. Schedule Performance Index
Answer: A
2. All work packages are complete
A. at EAC time
B. when BAC is equal to EAC
C. when BCWP intersects BCWS
D. when schedule variance is zero
E. c and d
Answer: B
3. Earned value is
A. the base line plan
B. completed work value
C. cost/cost variance
D. percent over or under budget
E. a and b
Answer: B
You could tell Diane was worried about her project. Her folks had been working on the project since Independence Day. Here it was already Halloween and they were just finishing up work that was supposed to have been completed by Labor Day. "Oh dear&
Answer: E
. Diane was so concerned about her project that she woke up dreaming about it. She thought to herself, "Well, our BCWP is 2, our ACWP is 4 and our BCWS is 6, so that means
A. our productivity was less than planned
B. our cost estimate at c
Answer: E
The measurement which best shows the difference between actual work and actual costs is
A. Cost variance
B. Percent over or under
C. Schedule variance
D. CPI
E. this is not a valid measurement
Answer: A
Rework costs ____ times budgeted costs.
A. +75, -25
B. +25, -10
C. 85
D. 10 to 15
E. 25 to 50
Answer: E
. If part of a project's costs will be paid in future years, the best way to determine the value of those costs in today's dollars is
A. estimated project payout
B. return on investment
C. net present value
D. discounted cash flow
Answer: D
. If the ACWP exceeds the BCWP, the cost estimate at completion will
A. increase
B. decrease
C. depend on the BCWS
D. exceed the schedule estimate at completion
E. a and d
Answer: A
. If the BCWS = $1,000,000, the BAC = $2,000,000, the ACWP = $1,500,000, the BCWP = $500,000 and you're halfway through the project after two years, what is the cost estimate at completion?
A. $2,000,000
B. $4,000,000
C. $6,000,000
D.
Answer: C
. Cost management requires a critical look at future expenditures and the controls exercised over those expenditures. The three types of cost estimates through which project expenditures are made are ________.
A. rough order of magnitude, guestimate
Answer: C
The cost estimate with the most precise estimate (i.e., the smallest range of error) is the ________ estimate.
A. engineering
B. budget
C. concept
D. definitive
E. contingency
Answer: D
. The cost estimate that has a range for error of minus 10 percent to plus 25 percent is the ________ estimate.
A. budget
B. definitive
C. parametric
D. analogy
E. contingency
Answer: A
There are usually two types of reserves in a project's budget. The ________ reserve is for cost variances from the plan because of inaccurate estimates or pricing and costs overruns, while the ________ is to accommodate costs for project work that were n
Answer: C
Feasibility studies are evaluations of both the technical and economic aspects of a potential project. In the economic area, one would look at such items as interest rates, present worth factors, capitalization costs, and ________.
A. human resource
Answer: B
Project financing can be extremely complex and can come from a variety of sources. However, ________ is not a potential source of financing for a project.
A. borrowing money from a bank
B. selling stocks in the project or corporation
C. se
Answer: D
Life cycle costing is a concept whereby all costs for a system are computed to determine the total cost of ownership. Life cycle cost categories include ________.
A. purchase, repair, and operation
B. development, procurement, and operation/mai
Answer: B
The integration of cost and schedule to provide measures of the project's performance is the earned value system, or contract performance measurement. The baseline for the earned value system is depicted as a slight "S" curve because ________.
Answer: C
The pricing of a project can be extremely complex in the development of valid cost estimates and price quotes from vendors. The tool that facilitates the pricing of a project by a structured decomposition of the total into individual elements of labor, m
Answer: E
In estimating the cost of work, the best source of cost information can be obtained from the ________.
A. customer
B. historical records
C. senior engineers
D. top management
E. independent consultants
Answer: B
Setting up a cost control system requires matching the work packages to the cost accounting system. The direct mapping of the work packages to the accounting is accomplished by establishing a ________.
A. work package cost/price
B. work breakdo
Answer: E
Cost overruns on a project have major impacts on the profitability of operations, but ________ do(es) not necessarily contribute to cost overruns of a project budget.
A. a change in contract scope
B. delays in schedule
C. lack of work forc
Answer: A
. Suppose the contingency allowance established to cover unforeseen activities of a project has been set at eight percent of the total project cost. The total dollars in the contingency allowance should be ________ as the project nears completion.
A
Answer: E
Suppose a contract has been in force for six months and the work is progressing, and then the buyer requests some changes in the design. The changes do not affect completed work but add some new items and subtract some existing items. The cost to the buy
Answer: E
. In the earned values system, the focus is on "cost of work," which is divided into "scheduled" and "performed" work. This is further defined as "budgeted" and "actual" work. The formula "BCWP - BCW
Answer: B
Indices can provide an indication of the status of a project. In the earned values system, there are two indices
Cost Performance Index (CPI) and Schedule Performance Index (SPI). The formula for CPI is ________.
A. ACWP/BCWS
B. ACWP/BCWP
Answer: C
Suppose that in the earned value system, the status of the project is reported as BCWS = 100, ACWP = 110, BCWP = 95. The project is now ________.
A. underspent and behind schedule
B. overspent and ahead of schedule
C. underspent and ahead
Answer: D
. Projects have direct and indirect costs that the project manager must track to ensure the budget is not exceeded. The project manager has the most control over direct costs such as ________.
A. bonuses, fees, and awards
B. labor, materials, a
Answer: B
. A project is being advertised to solicit bidders. The buyer has asked for two types of price first, if payment is made in total upon completion of the project; second, if payment is made 50 percent at the midpoint of completion and 50 percent upon tota
Answer: D
. The cost of money and cash flow can adversely affect the financial status of the project. One method of encouraging early payment of invoices is to offer a discount for payment within a few days. If an invoice for $10,000 was paid within (x) days (see
Answer: D
. Project financial audits are used to determine the current status of the financial health of a project, but ________ is/are not an area for financial audit.
A. a project budget system
B. a project computer system
C. a project change cont
Answer: B
A project audit is often a three-step process using different skills to assess the condition of the health of the project. The first audit, or first audit opportunity, is at the ________ phase.
A. start of the planning
B. start of the implement
Answer: C
The budget for a project is the baseline from which future expenditures are measured. Of the following, ________ do(es) not cause change to the budget baseline during project implementation.
A. change orders to the contract
B. expenditures to b
Answer: B
In the earned value system for determining project status, there are several methods of accepting credit for the completion of work. In the most common method, full credit is allowed after the work package is complete. A second method is to allow full cr
Answer: D
Because of the investment or risk associated with a project, the decision may be to ensure a high profitability. When this is the case, senior management should agree on profit ________ of the project.
A. capability at the beginning
B. margin (
Answer: D
Estimating costs for a project is difficult because of the lack of historical cost records, the uncertainty regarding the future state of the economy, and the lack of understanding as to the full scope of work. Successive estimating is one method of acco
Answer: C
The degree of uncertainty (lack of information) in a project affects the ability of cost estimators to make precise estimates to determine the total cost. One method to resolve the uncertainty is influence diagramming, which is used to evaluate ________.
Answer: B
. The most accurate estimates (and the most expensive to produce) are _______.
A. analogous estimates
B. parametric estimates
C. top-down estimates
D. bottom-up estimates
E. function point estimates
Answer: D
The ________ identifies the project elements that costs will be allocated to.
A. work breakdown structure
B. PERT estimates
C. earned value
D. order of magnitude estimate
E. BCWR
Answer: A
The EAC is a forecasting technique based on past project performance. It can be calculated using the formula ________.
A. cumulative actuals + (ETC X CPI)
B. cumulative actuals + new estimate for cost of work remaining
C. cumulative actual
Answer: D
The best way to manage the costs of change requests is to ________.
A. accept them orally
B. allow them to happen in ad hoc fashion
C. impose change unilaterally
D. document and authorize all changes
E. use the earned value syste
Answer: D
Materials management is crucial to the success of the project when resources are needed at a specified time and place to ensure continued progress. An assessment of the materials costs should consider not only the cost of purchase but also ________.
Answer: C
. Project financing is critical to large projects where neither the owner (buyer) or contractor (seller) has sufficient funds available to cover the costs incurred during project implementation. In such cases, a third party must provide the necessary cap
Answer: E
The financing plan for a project should detail the methods of obtaining and dispensing the capital over the full duration of the project. In preparing the plan and considering risk and reward, management should ensure that participants' credit standing i
Answer: C
. Investors are often used to obtain the necessary financing for major projects, which can transfer the ownership to the investors. The system is then leased back for operation and use. The major advantage for the investors is ________ , and the major ad
Answer: C
Lending institutions are eager to finance projects that have an excellent potential for being successful and repaying the loans. Timely repayment of the debt depends largely on ________.
A. the willingness of the owners to make payments
B. futu
Answer: B
The success of a project is usually considered its ability to meet the objectives established prior to the start of the project. In a more global view, to become a functioning entity the project must have working capital, which consists of ________.
Answer: D
. Under any type of contract, the owner (buyer) is always concerned with the cost of a project and the contractor's (seller's) expenditure rates. Although the fixed price contract transfers much of the risk to the contractor, the owner has a lot at risk
Answer: D
. The budget for a major project lasting several years is usually prepared to reflect expenditures on an annual basis. The budget is, therefore, compared to expenditures at the end of each accounting cycle (i.e., each year). This poses a potential proble
Answer: E
Project Cost Management includes all of the following functions EXCEPT
A. Resource planning
B. Resource leveling
C. Cost estimating
D. Cost budgeting
E. Cost control
Answer: B
Which of the following choices indicates that your project was 10% under budget?
A. BCWS = 100, BCWP = 110
B. ACWP = 100, BCWP = 110
C. BCWS = 100, ACWP = 110
D. ACWP = 110, BCWP = 100
E. BCWP = 100, BCWS = 110
Answer: B
. Earned value can best be defined as
A. The value of the equipment that has been installed as of the data date
B. The sum of the labor costs, which have been incurred on the project ot date
C. A method of measuring project performance
Answer: C
. The output from resource planning includes
A. Job descriptions
B. Salary schedules
C. The types of resources required
D. Analogous estimating
E. Historical informaiton
Answer: C
. Cost estimates may be expressed in I. Units of currency II. Staff hours III. Staff days
A. I only
B. II only
C. III only
D. I and II only
E. I, II, and III
Answer: E
All of the following are functions of cost control EXCEPT
A. Informing the appropriate project stakeholders of authorized changes in the cost baseline
B. Monitoring cost performance to detect variances from the cost baseline
C. Ensuring th
Answer: D
. During the sixth monthly update on a ten month $30K project, the analysis shows that the BCWS is $20K, and the ACWP is $10K. The BCWP is also determined to be $15K. What can be ascertained from these figures? I. Less has been accomplished that was plan
Answer: D
. Cost estimates include all of the following resource categories EXCEPT
A. Labor
B. Materials
C. Supplies
D. Inflation allowances
E. Time allocations
Answer: E
Parametric cost estimating involves
A. Using the WBS as the basis for estimating
B. Defining the parameters of the project life cycle
C. Caldculating individual cost estimates for each work package
D. Using rates and factors based on
Answer: D
All of the following choices represent inputs to the resource planning process EXCEPT
A. The policies of the particular organization (e.g. use of contracting or internalstaffing, or lease or purchase major equipment)
B. The WBS
C. Descript
Answer: D
Cost control is concerned with I. Influencing the factors that create change to the cost base line II. Determining that the cost baseline has changed III. Managing cost changes when they occur
A. I only
B. III only
C. I and III only
D
Answer: E
Historical results used in cost estimating may include I. Project team knowledge II. Project files III. Commerial cost estimating databases IV. Actual time to complete similar projects
A. I, II, and III only
B. I, II, and IV only
C. I, III
Answer: A
In the earned value system, cost variance is computed as
A. BCWP - BCWS
B. BCWP - ACWP
C. ACWP - BCWP
D. ACWP - BCWS
E. BCWS - BCWP
Answer: B
. Earned value includes I. Percent complete II. Actual cost of work performed III. Comleted work value IV. Budgeted cost of work performed
A. III only
B. I and II only
C. II and III only
D. I, III, and IV only
E. I, II, III, and
Answer: D
Analogous estimating
A. Uses bottom-estimating techniques
B. Uses the actual costs from a previous, similar project
C. Is used most frequently in the later stages of a project
D. Uses project characteristics in a mathematical model
Answer: B
. Inputs to resource planning include all of the following EXCEPT
A. The WBS
B. The Scope statement
C. A resource pool description
D. Organization policies
E. Resource requirements
Answer: E
Of the following four major processes contained in Project Cost Mangement, which are concerned with the Cost Baseline?
A. Resource Planning and Cost Estimating
B. Cost Estimating and Cost Budgeting
C. Cost Budgeting and Cost Control
D
Answer: C
In order to determine the project's Estimate at Completion, which of the following information is needed?
A. BCWP and ACWP
B. BCWP and CV
C. CPI and CV
D. ACWP and CPI
E. ACWP and ETC
Answer: E
. If BCWS = 100, BCWP = 98, adn ACWP = 104, the project is
A. Ahead of schedule
B. Headed for a cost overrun
C. Operating at project cost projections
D. Likely to come in under budget at completion
E. Behind schedule
Answer: B
. Which is an acceptable cause for "re-baselining" a $10M project
A. The monthly Consumer Price Index on some commodities essential to the project has gone up by 1.6%, an increase of 46% over the 1.1% that had been budgeted
B. The cli
Answer: B
Which item is most over budget?
<table>
<tr><th>Item <th> BCWS <th> ACWP <th> BCWP
<tr><td>1 <td> 10,000 <td> 11,000 <td> 10,000
<tr><td>2 <td> 9,00
Answer: E
Which item has the lowest SPI?
<table>
<tr><th> Item <th> BCWS <th> ACWP <th> BCWP
<tr><td> 1 <td> 10,000 <td> 11,000 <td> 10,000
<tr><td> 2 <td> 9,
Answer: D
According to earned value analysis, the SV of the project described below is BCWS = $2.2K, BCWP = $2K, ACWP = $2.5K, BAC = $10K
A. +$300 and the project is behind schedule
B. -$300 and the project is ahead of schedule
C. +$8K and the proje
Answer: E
What is the CPI for this project, and what does it tell us about cost performance thus far?BCWS = $2.2KBCWP = $2KACWP = $2.5KBAC = $10K
A. 0.20; actual costs are exactly as planned
B. 0.80; actual costs have exceeded planned costs
C. 0.80;
Answer: B
. The CV is BCWS = $2.2KBCWP = $2KACWP = $2.5KBAC = $10K
A. $300
B. ($300)
C. $500
D. ($500)
E. None of the above
Answer: D
What is the EAC for this project, and what does it represent?BCWS = $2.2KBCWP = $2KACWP = $2.5KBAC = $10K
A. $10K; the original project budget
B. $10K; the revised estimate for total project cost (based on performance thus far)
C. $12,500;
Answer: D
. Life-cyle cost estimates consider the
A. Costs of the project for the concept, planning, implementation, and closeout phases
B. Expected profits, measured by subtracting total costs from estimated gross revenues
C. Cost of ownership, inc
Answer: C
Accelerated depreciation allows a company to write capital expenses off its taxes more quickly. Which of the following is a recognized method of accelerated depreciation?
A. Straight-line
B. Double-declining balance
C. Rapid capital deduct
Answer: B
Experts contend that sunk costs should not be considered in making financial decisions about the future of a project. Sunk costs are
A. The initial outlay to get a project started
B. Costs that have been expended already
C. The average cos
Answer: B
. All the following statements about analogous estimating are true except that it
A. Supports top-down estimating
B. Is a form of expert judgement
C. Is used to estimate total project costs when a limited amount of detailed projectinformat
Answer: E
Which of the following estimates would most closely predict the actual cost of a project?
A. Order-of-magnitude
B. Budget
C. Definitive
D. Initial
E. Detailes
Answer: C
If a project is running behind schedule and the project manager decides to crash the network to catch up, which of the following rules should he/she follow?
A. Use early start times for noncritical tasks
B. use resource leveling to optimize the
Answer: D
. According to learning curve theory, when many items are produced repetitively
A. Production equipment that requires less operator training lowers unit costs
B. Unit costs decrease as production rates increase
C. Unit costs decrease in a
Answer: C
Which of the following is NOT an example of a direct cost?
A. Salary of the project manager
B. Subcontractor expenses
C. Materials used by the project
D. Electricity
E. B and D
Answer: D
84. As the fourth month on the Acme project, cumulative planned expenditures were $100K. Actual expenditures totaled $120K. How is the Acme project doing?
A. The project is ahead of schedule
B. The project is in trouble because of a cost overru
Answer: E
. In bottom-up cost estimating, accuracy is enhanced
A. With smaller work items
B. By using accurate historical information
C. If previous projects are similar in fact, not just in appearance
D. If the individuals or groups preparing
Answer: A
Working capital consists of
A. Current assets minus current liabilities
B. Funds reserved for bid and proposal costs
C. Funds set aside for unforeseen problems
D. Current liabilities plus current assets
E. Current liabilities min
Answer: A
According to the law of dimishing returns
A. Using more resources will result in proportionately more output
B. Using fewer resources will result in greater profit
C. Using more resources will result in proportionately less output
D.
Answer: C
Which of the following is a tool for analyzing a design, determining its functions, and assessing how to provide those functions cost-effectively?
A. Pareto diagram
B. Kanban
C. Configuration management
D. Value analysis
E. Manag
Answer: D
The cost management plan
A. Describes how CVs will be managed
B. Establishes the cost baseline
C. Measures and monitors cost performance on the project
D. A and C
E. A, B, and C
Answer: A
. Cost accounts
A. Are charge accounts for personnel time management
B. Summarize project costs at level 2 of the WBS
C. Identify and track management reserves
D. Represent the basic level at which project performance is measured and
Answer: D
The internal rate of return is a measure of a project's expected profitability that can be thought of as the
A. After-tax profit reported to the government
B. Average rate of return for the project
C. EAC minus BAC
D. CV percentage
Answer: B
. A resource-limited project is one in which
A. The project must be finished as soon as possible but without exceeding a specific level of resource usage
B. Functional managers do not allocate the required number of resources at the time requir
Answer: A
Considering the project schedule during the cost budgeting process
A. Identifies the project elements so that costs can be allocated
B. Allows costs to be assigned to the time period when they will be incurred
C. Provides another way to he
Answer: B
. Resource leveling is an important tool for the project manager because
A. Less management attention is required if the use of a given resource is nearly constant over time
B. A just-in-time inventory policy may be used without worrying that t
Answer: E
The purpose of resource planning is to
A. Determine the physical resources needed to perform project activities
B. Approximate the costs of resources needed to complete project activities
C. Provide quantitative assessments of the costs of
Answer: A
The cost of investing in a particular project and, therefore, forgoing the potential benefits of other projects is known as
A. Variable cost
B. Total cost
C. Fixed cost
D. Indirect cost
E. Opportunity cost
Answer: E
Which of the following techniques for cost estimating is considered the least accurate?
A. Bottom-up estimating
B. Parametric modeling
C. Analogous estimating
D. Computerized tools
E. Range estimating
Answer: C
. Net present value is the
A. After-tax value of working capital
B. Value today of future cash flow
C. Total budget as of today
D. Total budget as of today plus management reserve
E. Future value of present cash flow
Answer: B
Supporting detail for cost estimates should include
A. A description of the scope of work
B. Documentation of the basis of teh estimate
C. Documentation of any assumptions made
D. An indication of teh range of results
E. All of t
Answer: E
Financial analysis of payback period identifies the
A. Ratio of discounted revenues over discounted costs
B. Future value of money invested today
C. Project that is expected to become profitable most quickly
D. Point in time where cos
Answer: C
. The purpose of cost budgeting is to
A. Determine the cost of the resources needed to complete project activities and allocate them to the proper chart of accounts for the organization
B. Provide a quantitative assessment of the likely costs o
Answer: D
Resource loading describes
A. A method to minimize the period-by-period variations in resources by shifting tasks withintheir slace allowances
B. The number of people assigned to each task
C. The amount of materials needed for each task
Answer: D
. Anticipating the actios and resources required to satisfy customers is an investment in the future. Therefore, the project manager should consider the cost of quality in determining the project's budget. The cost of quality includes the
A. Cost of
Answer: D
To determine EAC, the project manager can
A. Take actuals to date plus the remaining project budget modified by a performance factor
B. Take actuals to date plus a new estimate for all remaining work
C. Take actuals to date plus the remain
Answer: E
. The undistributed budget is part of the
A. Management reserve
B. Performance measurement baseline
C. Level-of-effort cost accounts
D. Indirect pool of accounts
E. General and administrative accounts
Answer: B
Contingencies should be justified
A. Explicitly, in advance of committing to the budget
B. Implicitly, to allow for a management reserve
C. As needed during the project
D. `At the time the budget is prepared
E. At the time the pr
Answer: A
The process of cost control includes all the following actions except
A. Monitoring cost performance to detect variancesa from the plan and determining the reasonsfor both positive and negative variances
B. Ensuring that all appropriate changes
Answer: C
A rolling-wave budget provides
A. Maximum assurance that management's oals are reasonable and attainable because supporting details are included
B. A full-period projection that uses a top-down, unsupported budget along with a fully supported,
Answer: B
The method of calculating the EAC by adding the remaining project budget (modified by a performance factor) to the actuals to date is used most often when the
A. Current variances are viewed as typical of future variances
B. Project management
Answer: A
The cumulative cost curve for planned and actual expenditures
A. Shows the cumulative expenditures for the project
B. Is also knows as a S-curve
C. Helps to monitor project performance at a glance
D. Shows the difference beeetween pla
Answer: E
. Rebaselining may be an output of cost control when
A. CVs are severe, and a relaistic measure of performance is needed
B. Revised cost estimates are prepared and distributed to stakeholders
C. Corrective action must be taken to bring exp
Answer: A
. All the following statements are true about interface, EXCEPT
A. Considered to be the most difficult aspect of implementing the project plan
B. The process of coordinating the various elements of the project so that they meet their joint goal
Answer: E
. The input to project initiation consists of
A. The product or service description
B. The company's strategic plan
C. The project selection criteria
D. Historical data
E. All of the above
Answer: E
. The subdivision of major project deliverables, as identified in the scope statement, into
smaller, more manageable components is called:
a. parametric estimation.
b. scope definition.
c. feasibility analysis.
d. benefit­cost a
Answer: b
. The process of establishing clear and achievable objectives, measuring their achievement,
and adjusting performance in accordance with the results of the measurement is called:
a. strategic planning.
b. alternative objectives inventory.
Answer: c
. A fundamental tenet of modern quality management holds that quality is most likely to be
achieved by:
a. planning it into the project.
b. developing final inspections for quality.
c. striving to do the best job possible.
d. con
Answer: a
The time­phased budget that will be used to measure and monitor cost performance in the
project is called the:
a. work breakdown structure.
b. project schedule.
c. cost baseline.
d. cost budget.
Answer: c
At XYZ Inc., the hourly wage for semi­skilled workers is $14.00. The annual audit shows
that fringe benefits cost 30% of basic wages, and that overhead costs are 60% of wages plus
fringe benefits. What is the ``loaded'' hourly wage for a semi
Answer: c
When there is uncertainty associated with one or more aspects of the project, one of the first
steps to take is to:
a. revise project plan.
b. conduct a risk­benefit analysis.
c. conduct a needs analysis.
d. increase the estimat
Answer: d
A narrative description of products or services to be supplied under contract is called:
a. the project plan.
b. a statement of work.
c. an exception report.
d. Pareto analysis.
Answer: b
. An example of scope verification is:
a. reviewing the performance of an installed software module.
b. managing changes to the project schedule.
c. decomposing the WBS to a work package level.
d. performing a benefit/cost analysis to
Answer: a
All of the following are examples of a source of scope change except:
a. a variation in government regulations.
b. failure to include a required feature in the design of a telecommunication system.
c. discovering a need to engage in bottom
Answer: c
Learning curve theory emphasizes that in producing many goods:
a. cost decreases as production rates increase.
b. average unit cost decreases as more units are produced.
c. materials become cheaper when they are purchased in bulk.
d.
Answer: b
Adjusting resources applied to maintain constant resource loading is called:
a. floating.
b. leveling.
c. restructuring.
d. crashing.
Answer: b
Configuration management is:
a. used to ensure that the description of the product is correct and complete.
b. the creation of the work breakdown structure.
c. the set of procedures developed to assure that project design criteria are met.
Answer: a
The type of contract that transfers most of the cost risk to the seller is:
a. cost plus award fee.
b. fixed incentive fee.
c. cost plus fixed fee.
d. fixed price.
Answer: d
It is critical for your company to offer its products on the Internet to increase its market
share. The company has no previous experience in this area, but it believes that knowledge
is needed rapidly. As you have shown an interest in the Inte
Answer: b
Given the information in the following table, what is the expected value from this risk event?
<table>
<tr><th> Probability <th> Result
<tr><td> .4 <td> ­10,000
<tr><td> .3 <td
Answer: d
A contractor is working on a fixed price contract that calls for a single, lump sum payment
upon satisfactory completion of the contract. About halfway through the contract, the
contractor's project manager informs their contract administrator
Answer: b
To be successful, negotiating must be conducted in an atmosphere of:
a. flexibility and understanding.
b. sincerity and thoughtfulness.
c. mutual respect and cooperation.
d. sincerity and prudent caution.
Answer: c
Inputs to cost budgeting include all of the following except:
a. cost baseline.
b. cost estimates.
c. work breakdown structure.
d. project schedule.
Answer: a
A precise description of a deliverable includes a:
a. specification.
b. baseline.
c. work package.
d. WBS element.
Answer: a
. Theory X management is based upon an assumption that:
a. quality improvements lie in the hands of quality circles.
b. profits are tied to meeting the project's baseline milestones.
c. absenteeism is tied to poor working conditions.
Answer: d
All of the following are characteristics of parametric estimating except:
a. historical data inputs.
b. quantifiable relationships.
c. scalable calculations.
d. international standards.
Answer: d
Of the following estimates, which most accurately reflect the actual cost of the project?
a. bottom­up estimates.
b. order of magnitude estimates.
c. preliminary estimates.
d. conceptual estimates.
Answer: a
. Including a contingency reserve in the project budget is intended to:
a. reduce the probability of scope changes.
b. increase the effectiveness of scope controls.
c. reduce the probability of a cost overrun.
d. increase the effectiv
Answer: c
. Cost control outputs include all of the following except:
a. estimate at completion.
b. budget updates.
c. revised cost estimates.
d. cost baseline.
Answer: d
Pareto analysis, cause and effect diagrams, and flow charts are tools used in quality:
a. control.
b. assurance.
c. planning.
d. verification.
Answer: a
Constrained optimization methods of project selection typically include:
a. scoring models for procurement.
b. benefit­cost ratios for finance.
c. multi­objective programming algorithms.
d. subjective computer­based simulation anal
Answer: c
Activity duration estimate inputs include all of the following except:
a. resource requirements.
b. basis of estimates.
c. activity lists.
d. constraints.
Answer: b
Risk response development is intended to:
a. create steps to identify project risks.
b. formulate strategies for dealing with events.
c. document lessons learned from project risks.
d. develop measures to quantify project risks.
Answer: b
. Inputs for project initiation include all of the following except:
a. a product description.
b. strategic plans.
c. a project charter.
d. selection criteria.
Answer: c
As part of the contract close­out, project management should document the:
a. statement of work.
b. payment schedules.
c. formal acceptance.
d. change control process.
Answer: c
The process of performance reporting includes all of the following except:
a. status reporting.
b. progress reporting.
c. forecasting.
d. product analysis.
Answer: d
Constructive team roles include:
a. investigator, clarifier, and closer.
b. compromiser, blocker, and closer.
c. initiator, encourager, and gatekeeper.
d. investigator, recognizer, and summarizer.
Answer: c
Which of the following statements concerning contract type is correct?
a. fixed price contracts offer buyers the highest potential risk.
b. cost reimbursable contracts offer buyers the lowest potential risk.
c. fixed price contracts are il
Answer: d
A Work Breakdown Structure numbering system should allow project staff to:
a. identify the level at which individual WBS elements are found.
b. identify configuration management milestones.
c. estimate the costs of WBS elements.
d. pr
Answer: a
All of the following are true quality statements except:
a. Computer­aided design systems can improve quality, but only at the expense of
an increase in the cost of design.
b. Project quality management must address both management of the
Answer: a
A project was estimated to cost $1.5 million and scheduled to last six months. After three
months, the earned value analysis shows the following: EV = $650,000, PV = $750,000, and
AC = $800,000. The schedule and cost variances are:
a. SV =
Answer: a
A precise summary of a physical item, procedure, or service for implementation of an item
or service is called a:
a. work package.
b. baseline description.
c. product description.
d. work breakdown structure.
Answer: c
All of the following are examples of tools often used in cost estimating except:
a. parametric modeling.
b. duration estimating.
c. bottom­up estimating.
d. analogous estimating.
Answer: b
The most crucial time for project risk assessment is:
a. when a problem surfaces.
b. during the planning phase.
c. during the close­out phase.
d. after the schedule is published.
Answer: b
Inputs used during scope planning include all of the following except:
a. constraints.
b. project charter.
c. budget/cost analysis.
d. product description.
Answer: c
A scope statement is important because it:
a. provides the basis for making future project decisions.
b. provides an executive summary of the project for sponsors.
c. documents approval of the project for the stakeholders.
d. provided
Answer: a
The major processes for project integration management are project plan development:
a. project plan execution, and scope change control.
b. project plan execution, and overall change control.
c. overall change control, and scope change co
Answer: b
A project's payback period ends when:
a. maximum profit for that period is realized.
b. total project costs are minimized.
c. total monthly revenue equals total monthly costs.
d. cumulative revenue equals cumulative costs.
Answer: d
A project should be terminated for all of the following reasons except:
a. lack of team synergy necessary to achieve top quality.
b. the project no longer meets the company's objectives.
c. the resources are not available to complete proje
Answer: a
The decomposition process is a technique used to construct a:
a. precedence network diagram.
b. critical path analysis.
c. cost variance analysis.
d. work breakdown structure.
Answer: d
The first topic to address in a project kick­off meeting is:
a. roles and responsibilities.
b. resource plans and schedules.
c. project plans and budgets.
d. project scope and schedules.
Answer: a
Inputs into overall change control include all of the following except:
a. project plan.
b. change requests.
c. change control system.
d. performance reports.
Answer: c
A project schedule completion date will change if:
a. the critical path is shortened.
b. contingency funds are used.
c. float time is allocated too late.
d. project resources are added early.
Answer: a
Risk quantification includes:
a. sub­totaling internal and external events.
b. identifying potential risks and impact.
c. evaluating event probability and impact.
d. developing contingency plans and resources.
Answer: c
The most common sequence for risk management activities is risk identification, :
a. risk quantification, and risk response development.
b. risk response assessment, and risk planning.
c. risk mitigation, and risk management.
d. risk
Answer: a
The objective of fast tracking a project is to:
a. increase productivity.
b. reduce project duration.
c. accelerate cost tracking.
d. mitigate project risks.
Answer: b
Complex projects, involving cross­disciplinary efforts, are most effectively managed by a:
a. projectized organization.
b. functional organization.
c. strong matrix organization.
d. strong virtual organization.
Answer: c
You've been engaged to manage a project with an estimated cost of $1,000,000 that has been
publicly approved by the project's sponsor. Your earned value calculations indicate that the
project will be completed on time and under budget by $200,0
Answer: d
. One common way to compute estimated at completion (EAC) is to take the project
budgeted­at­completion and:
a. divide it by the schedule performance index.
b. multiply it by the schedule performance index.
c. multiply it by the cos
Answer: d
Project sponsors have the greatest influence on the scope, quality, time, and cost of the
project during the:
a. concept phase.
b. development phase.
c. execution phase.
d. closeout phase.
Answer: a
Ideally, communication between the project manager and the project team members should
take place:
a. via daily or weekly status reports.
b. through approved template forms.
c. by written and oral communication.
d. through the fo
Answer: c
During the project scope planning process, the work breakdown structure should be
developed to:
a. the sub­project levels by phase.
b. the levels determined by the project office.
c. levels allowing for adequate estimates.
d. co
Answer: c
Responses to risk threats include all of the following except:
a. avoidance.
b. acceptance.
c. mitigation.
d. rejection.
Answer: d
To learn who has approval authority for revisions in scope, a project manager should:
a. refer to the resource assignment matrix.
b. refer to the change control plan.
c. review the original project charter.
d. request a copy of the or
Answer: b
A purchase order represents a:
a. cash out­flow.
b. project expense.
c. commitment.
d. capital investment.
Answer: c
. The process of determining how a risk event will affect the project schedule is called risk:
a. identification.
b. mitigation.
c. simulation.
d. assessment.
Answer: d
Conflict resolution techniques that may be used on a project include:
a. compromising, directing, and withdrawing.
b. compromising, smoothing, and withdrawing.
c. confronting, directing, and smoothing.
d. confronting, smoothing, and w
Answer: d
. Risk identification outputs include the following except:
a. risk triggers.
b. decision trees.
c. inputs to other processes.
d. risk events.
Answer: b
Configuration management is a technique for:
a. overall change control.
b. project plan execution.
c. scope planning.
d. risk quantification.
Answer: a
A key activity for achieving customer satisfaction is to define customer:
a. benefits.
b. requirements.
c. feedback.
d. preferences.
Answer: b
Your project is behind schedule due to conflict among team members. After resolving the
conflict, you should consider:
a. leveling the resources.
b. reducing resource loads.
c. reassigning resources.
d. crashing the schedule.
Answer: d
When it appears that a design error will interfere with meeting technical performance
objectives, the preferred response is to:
a. develop a new Work Breakdown Structure.
b. develop alternative solutions to the problem.
c. update the
Answer: b
Your most recent project status report contains the following information:
BCWP = 3,000, ACWP = 3,500, and BCWS = 4,000. The schedule variance is:
a. + 1,000.
b. + 500.
c. ­ 500.
d. ­ 1,000.
Answer: d
All of the following are contract types except:
a. cost­reimbursable.
b. arbitration­based.
c. time and material.
d. fixed­price.
Answer: b
. The disorientation experienced by individuals who suddenly find themselves living and
working in an unfamiliar environment is known as:
a. culture shock.
b. socio­centrism.
c. cultural bias.
d. ethno­centrism.
Answer: a
A detailed project schedule can be created only after
a. A project plan is created
b. A WBS is created
c. A budget is created
d. A project control plan is created
Answer: b
Which of the following is not part of the team's stakeholder management effort?
a. Give them extras
b. Identify them
c. Determine their needs and expectations
d. Manage their expectations
Answer: a
In a projectized organization, the project team
a. Reports to many bosses
b. Has loyalty to the project
c. Will not always have a home
d. B & c
Answer: d
When it comes to changes, the project manager's attention is best spent on
a. Handling changes when they come to light
b. Recording changes
c. Letting management know about changes
d. Preventing unnecessary changes
Answer: d
A work authorization system is used to
a. Control who does each task
b. Control gold platting
c. Let management know what tasks are planned
d. Let functional managers know what tasks are planned
Answer: b
During the execution of a project the project manager determines that a change is needed to material purchased for the project. The project manager calls a meeting of their team to plan how to make the change. This is an example of
a. Management by
Answer: b
You are a new project manager who has never managed a project before and are asked to plan a new project. It would be best in this situation to rely on _______ during planning in order to improve your chance of success?
a. Your intuition
b. You
Answer: c
. A project manager discovers during planning that part of the scope of work is undefined. They should
a. Continue to plan the project because the scope of work is not ready
b. Do what they can to get the scope of work defined
c. Wait unti
Answer: b
Linear programming is an example of what type of project selection criteria?
a. Constrained optimization
b. Comparative approach
c. Benefit measurement
d. Impact analysis
Answer: a
A WBS numbering system should allow project staff to
a. Estimate costs of WBS elements
b. Provide project justification
c. Identify the level at which individual WBS elements are found
d. Use it in project management software
Answer: c
. A chief characteristic of the Delphi technique is
a. Extrapolation from historical data
b. Intuitive expert opinion
c. Analytical hierarchy process
d. A guess
Answer: b
. During a project team meeting a team member suggests an enhancement to the scope of the work that is beyond the scope of the project charter. The project manager points out that the team needs to concentrate on completing all the work and only the work
Answer: b
. Management by objectives works only if
a. It is supported by management
b. The rules are written down
c. The project does not impact the objectives
d. The project includes the objectives in the charter
Answer: a
In order to manage a project effectively, work should be broken down into small pieces. Which of the following does not describe how far each task should be broken down?
a. Can be completed in under 80 hours
b. Cannot be logically subdivided fu
Answer: c
Contains detailed descriptions of work packages?
a. WBS dictionaries
b. Scope of work
c. Budget estimates
d. Cost estimates
Answer: a
Which of the following estimating methods does not use dummies?
a. PERT
b. CPM
c. PDM
d. Detailed
Answer: c
Which of the following is not TRUE?
a. CPM uses most likely time estimate
b. PERT is superior to CPM because it requires three time estimates per task
c. PERT provides an optimistic, pessimistic and most likely estimate for each task
Answer: d
Due to the cost overruns, Diane has sent a status report to the CEO of her company. Assuming he reads it, she can expect him to remember what percent of the report?
A. 73% to 77%
B. 23% to 27%
C. -25% to 75%
D. 85%
E. 50%
Answer: A
Which of the following methods to resolve conflict is most likely to create a "wounded warrior"?
A. Forcing
B. Compromising
C. Accommodation
D. Avoidance
E. Coercion
Answer: D
Decoder" is not synonymous with "receiver" because
A. the decoder interprets based on his or her frame of reference
B. the decoder is not a position on the team
C. the decoder evaluates, uses assumptions and self-interest wh
Answer: E
People generally remember __ % of the spoken word in 1-2 days and __ % in 2 months.
A. +50, +75
B. +50, +25
C. +75, -25
D. +25, -10
E. +10, -5
Answer: B
In a simple, interactive, one-on-one communication process, there are the sender and receiver of information. The sender is the one who transmits the signals, while the receiver ________ the signals.
A. accepts
B. mixes
C. rejects
D.
Answer: D
The communication process must have a medium to convey information between two or more parties. The three common media are ________.
A. written, spoken, and signalized
B. visual, audio, and tactile
C. seeing, talking, and listening
D.
Answer: B
Communications between two individuals can be affected by either the attitude of either party or an external source disrupting the flow of information. An example of a barrier between the parties involved in verbal communications and an example of a disr
Answer: C
Of the five basic approaches to conflict resolution that characterize an individual's human resource management style, the one that produces a "win-lose" outcome whereby the project manager uses his/her power to overrule the participant in the
Answer: D
Management styles affect the confidence level given a project manager by subordinates, peers, and superiors. When a project manager is judicial in his/her management style, s/he is ________ .
A. honest, sincere, able to motivate and to press for the
Answer: E
ommunications between individuals while talking may also involve nonverbal communications, or body language. Body language is most commonly associated with ________.
A. twisting and shrugging
B. gestures and facial expressions
C. toe tappi
Answer: B
In negotiations, there are always ongoing communications in an attempt to reach a position that is mutually agreeable to all parties. One means (facilitator) of communication during the negotiation phase is to ________.
A. obtain written concurrence
Answer: E
Communication includes understanding the other person and reaching a consensus as to what was said. The use of ________ is a means of giving feedback to the speaker by rephrasing the speaker's words to ensure there is a level of understanding.
A. gi
Answer: B
Communications between the project manager and a team member take many forms, but it would not include a ________.
A. memorandum announcing a meeting of the team
B. letter of commendation to a team member
C. performance appraisal for a tea
Answer: D
In face-to-face communications, individuals send two messages when they speak. The two message aspects are content and command. The first contains that part of the message about which two or more persons can agree, and the second contains ________.
Answer: B
Barriers to communication can be invisible to the casual observer but can often be greater obstacles than physical barriers. However, barriers do not include ________.
A. semantic ordinates, or absolute words
B. differences in frames of referen
Answer: D
Team members may "filter" information to the project manager for several reasons. Filtering, a selective reduction in the quantity and quality of information, is promoted through all of the following except when the team member ________.
A
Answer: E
The factors of the structural environment can be manipulated (positively and negatively) to improve or degrade the effective communications within a project team. Of the following factors, the one that can be manipulated the most to change the level of c
Answer: C
Project managers must strive to improve communications within the project team as well as with external elements. The project manager can improve communications by removing ________ of the information.
A. delays, impediments, and barriers
B. fi
Answer: B
The most basic model for the communication process consists of three basic elements ________. When these three elements are present, communication may result.
A. words, illustrations, and mathematics
B. people, transmission medium, and informat
Answer: D
In the communication process, "noise" is the word used to describe factors and forces inhibiting the exchange of information between two or more parties. Noise includes all of the following but ________.
A. culture
B. behavior
C.
Answer: E
In the project environment, there are four general categories of communication formal written, informal written, formal verbal, and informal verbal. Of the following, the one that is not an example of formal written communication is a ________.
A. p
Answer: D
To ensure a team member understands the work to be accomplished, the project manager may be more assured of the effectiveness of his/her communication by ________.
A. obtaining feedback and evaluating the end result of the work
B. restating the
Answer: A
Communication to a group in a meeting multiplies the potential for misunderstanding unless the structure is maintained. One major communication consideration in obtaining an understanding and commitment is that ________.
A. objectives may not be rea
Answer: D
Meeting management facilitates the communication of information between individuals. A legitimate reason for assembling the project team in a meeting includes ________.
A. impressing everyone with the project manager's power
B. providing an opp
Answer: C
The project manager has three primary interests who need information and are involved in the project's success. These are the ________.
A. customer, project team, and project sponsor/boss
B. customer, client, and project team
C. client, fi
Answer: A
The project manager must maintain an effective communication link with the customer to ensure the customer's satisfaction with the progress of the project. The project manager maintains this link through ________.
A. subordinates, project team membe
Answer: C
The project manager schedules a quarterly technical review with the customer to assure him/her that the project is progressing as planned. The project manager plans a series of briefings on the cost, schedule, and technical aspects of the project that sh
Answer: B
Suppose the project manager is appointed to manage a new project that has just been given approval to start the planning requirements. The project manager is new to the organization and has inherited a project team previously selected by top management.
Answer: D
In the project environment, it is helpful to publish a formal document showing the chain of communications. This document's greatest contribution to the project is to ________.
A. limit the authority of staff members on matters that are the prerogat
Answer: E
The project environment is always in need of effective communication for individuals to exchange and understand information. When everyone is permitted to talk to anyone, essential communication ________.
A. can take the shortest route from the send
Answer: A
The customer-project manager relations are perhaps the most important aspect to the successful implementation of the project work because ________.
A. the customer is always right in defining the contract
B. the customer doesn't understand proj
Answer: C
The project manager must communicate with several different people in the course of managing the project. His/her sole purpose for sending a message is to ________.
A. impress upon the receiver the importance of the project manager
B. convey wo
Answer: C
Project managers must write correspondence to many individual parties who are project stakeholders. The most important aspect of the project manager's correspondence is to ensure ________.
A. the grammar is correct
B. the format is correct for
Answer: C
The most difficult and costly type of communication performed by the project manager is ________.
A. the formal letter to the customer
B. the meeting or conference
C. the technical specification update
D. the contract modification
Answer: B
Meetings may be held for a number of different purposes and may involve different parties. The types of meetings may be classified as information sharing, problem solving, decision making, planning, and evaluation. The definition of a problem solving mee
Answer: D
Suppose the project manager is called to an information meeting with the customer and a problem is raised. This problem has major implications for the project manager's company, but the customer wants to pursue a solution at the meeting. The project mana
Answer: C
Customers often attempt to resolve issues in meetings with the project manager. The project manager should anticipate the raising of issues and be ________.
A. ready and willing to give an immediate response
B. sensitive to all the nuances of t
Answer: B
Project communications are vital to the success of the project meeting its objectives. Documentation is a form of this communication and is often not recognized as a part of the project. Of the following, the one that is not a form of project communicati
Answer: D
139. The project manager's time is limited, and the opportunity to discuss the project elements with the team is also limited if the project is to be properly managed. Therefore, the project manager must balance his/her time for communications by _______
Answer: E
ffective communications between elements of a large project improves the probability of success for the project through better information exchanges. In addition to the communication skills required for effective communication, communication planning foc
Answer: B
Communicating requirements to project participants is the key to establishing the basis for building a product to "conform to the requirements." Poor communication is often the cause of imprecise specifications that a vendor, subcontractor, or
Answer: B
he documentation of a project is a form of communication even when the document is completed and placed in a file for future reference. This latent form of communication serves a purpose by recording the facts for future use. Latent communication is ofte
Answer: E
Closing out a project's contract is both an intellectual (cognitive) issue and an emotional (affective) issue dealing with details and attitude, respectively. The communication needed to effectively complete the contract must deal with both issues. There
Answer: E
The major processes of project communications management are
A. Communications requirements, information distribution, performance reporting, and administrative procedures
B. Communications planning, information distribution, performance report
Answer: B
The three major types of communication are
A. Written, oral, and graphic
B. Written, oral, and visual
C. Verbal, written, and electronic
D. Verbal, formal documentation, and informal documentation
E. Verbal, project records, and
Answer: C
Communication barriers are a more frequent source of conflict in matrix and projectized environments than functional organizations for all the following reasons EXCEPT
A. Communication is the prime focus of an expediter type of project manager
Answer: A
A communication plan details all of the following EXCEPT
A. To whom information will flow, and what methods will be used to distribute various types of information
B. What information will be gathered, how it will be gathered, and how often it
Answer: D
The three principal reasons for maintaining good document control are
A. Timely communication, collection of performance appraisal data, and assuring proper disposal of sensitive documents
B. Timely communication, maintaining proper approvals,
Answer: C
Ways to improve listening ability include all of the following EXCEPT
A. Focusing on concepts and ideas
B. Listening to feedback
C. providing feedback
D. Performing other activities while the speaker is talking
E. Allowing the sp
Answer: D

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