Entry Test for Project Cost Management

Entry Test Total Questions: 17

1. Which of the following is not a example of a direct cost

a. Machine Hours
b. Labor Expense
c. Materials Cost
d. Rent for the Corporate Office

2. Which of the following is not a measure of the profitability of a

project
a. Return on original investment
b. Net present Value
c. Depreciation
d. Discounted Cash flow
e. None of the above

3. The most effective means of determining the cost of a project is to

price out the
a. Work Breakdown Structure
b. Linear Responsiblity Chart
c. Project Charter
d. Scope Statement
e. Cost Management Plan

4. Which of the following is referred to as payback period

a. the number of periods required to recover the initial investment
b. the rate of return on the investment
c. the number of periods required to bring project cost back
to the original budget based on current performance
d. Loan payment schedule
e. None of the above

5. Cost management Includes

a. Cost Estimating
b. Cost Budgeting
c. Cost Control
d. All of the above

6. How is analogous estimating performed?

a. It uses bottom-up estimating techniques.
b. It uses management's opinion of the estimate of each task.
c. It uses top-down estimating techniques.
d. It uses historical costs.

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 Entry Test for Project Cost Management

7. Your company is undergoing a change in ownership and the new

owners are looking at the total cost of all projects. Which of the
following would provide the BEST indicator of your total product
costs?
a. Estimate at complete
b. Life-cycle cost
c. Earned Value
d. Net present value

8. The project's sponsor has just informed you that the budget for your
project has been reduced. What should you do FIRST?
a. Discuss the budget change with the project's team members
b. Inform the sponsor that budget changes are detrimental to the success of the
project
c. Inform the sponsor of the project management triple constraint
d. Accept the budget changes and begin looking for supplemental funding

9. A project manager has completed a WBS and cost estimates for each
work package. To create a cost estimate from this data, the project
manager would:
a. Use the highest level of the WBS to estimate analogously.
b. Sum up the work package and risk reserve estimates.
c. Roll up work package estimates into a project total.
d. Gain expert opinions of the project total costs.

10. A cost management plan contains a description of:

a. all the costs.
b. how resources are allocated.
c. the budgets and how they were calculated.
d. how cost variances will be managed.

11. You've just completed the initiation phase of a small project and are
moving into the planning phase when a project stakeholder asks you
for the project's budget and cost baseline. What should you tell her?
a. The project budget can be found in the project's charter, which has just been
completed.
b. The project budget and baseline will not be finalized and accepted until the
planning phase is completed.
c. The project plan will not contain the project's budget and baseline; this is a
small project.
d. It is impossible to complete an estimate before the project plan is created.

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 Entry Test for Project Cost Management

12. Your boss has asked you for a cost estimate for the project, but it is
early in the project creation process and there is very little project
information. In this circumstance, what is the BEST way to estimate
this project?
a. Do a parametric estimate
b. Ask the team for estimates of each task
c. Provide an order of magnitude estimate
d. Calculate an estimate using a computer model

13. A budget update is an output of which cost management process?

a. Resource planning
b. Cost estimating
c. Cost budgeting
d. Cost control

14. A project may be selected based on all of the following EXCEPT:

a. benefit measurement.
b. net present value.
c. the number of resources used.
d. value analysis.

15. Which type of cost is team training?

a. Direct
b. NPV
c. Indirect
d. Variable

16. What is present value?

a. Value of assets that a company owns
b. Today's value of future cash flows
c. Future value of money on hand today
d. Current value of today's assets adjusted for inflation

17. Value analysis is performed to get:

a. more value from the cost analysis.
b. management to buy into the project.
c. team to buy into the project
d. a less costly way of doing the same scope of work.

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