Project Cost Management- Sample Questions

Question - 1

Given the following estimates: Optimistic 3 days, Pessimistic 9 days, and most likely 6 days. What is the PERT weighted average?

A. 6

B. 4

C. 6.3

D. 6.1


A is the correct answer. ptimistic = tO, most likely = tM, Pessimistic = tP. PERT weighted average = (tO + 4*tM + tP)/6 = (3+4*6+9)/6 = 36/6 = 6


Question - 2

Given the following estimates: Optimistic 3 days, Pessimistic 9 days, and most likely 6 days. What is the Triangular Distribution (tE) ?

A. 6

B. 4

C. 6.3

D. 6.1


A is the correct answer. Optimistic = tO, most likely = tM, Pessimistic = tP. Triangular Distribution = (tO + tM + tP)/3 = (3+6+9)/3 = 18/3 = 6


Question - 3

If You are the project manager for a Project. You are about to create the cost estimates for the project. Which of the following inputs will help you?

A. Scope Baseline

B. Project Schedule

C. Risk Register

D. All of the above


D is the correct answer. All are inputs of estimate cost.


Question - 4

Which statement is true about Bottom-up estimating?

A. Estimating the cost of individual work items and then rolling up the costs to arrive at a project total.

B. Uses the actual cost of a previous, similar project as the basis for estimating the cost of the current project.

C. Uses a statistical relationship between relevant historical data and other variables to calculate a cost.

D. None of the above


A is the correct answer. Estimating the cost of individual work items and then rolling up the costs to arrive at a project total is more accurate.


Question - 5

You have elected to use parametric modelling while Estimating Costs for the project. Which one of the following is an example of parametric modelling?

A. $10 per pound

B. Historical information from a similar project

C. Estimates built from bottom-up based on the WBS

D. Estimates based on top-down budgeting


A is the correct answer. A is correct; $10 per pound is an example of parametric modelling. Parametric modelling: Using project characteristics (or parameters) in a mathematical model to predict costs (e.g., price per square foot). B is incorrect, as historical information is analogous, not parametric. C is incorrect; bottom-up estimating is not a parametric modelling. D is incorrect, top-down budgeting is related to analogous estimating .


Question - 6

Your company has been hired to configure software at 500 workstations. All workstations need equal time to configure. You calculate the time to configure each workstation as 5 hours. The cost for labour is calculated at $500 for each workstation. Your Project Sponsor disagrees with your labour estimate. Why is it so?

A. You haven't completed one workstation yet, so you don't know how long the work will actually take.

B. You have not factored in all of the effort applied to the work.

C. You have not considered the law of diminishing returns.

D. You have not considered the learning curve.


D is the correct answer. D is the best choice. As the project team completes more and more units, the time to configure a workstation should take less and less time.


Question - 7

Your company has been hired to configure software at 500 workstations. All workstations need equal time to configure. The contract for the project is set at a fixed cost, and the incentive based on how fast the project work is going to be completed. Management has requested that you study the work method to determine a faster, less costly, and a better method to complete the project. This scenario is an example of ?.

A. Time Constraint

B. Schedule Constraint

C. Value Analysis

D. Learning Curve


C is the correct answer. Value Analysis is a systematic approach to find less costly ways to complete the same work. A and B are incorrect, as this situation does not describe a specific time or cost constraint. D is incorrect: the learning curve happens as the project team completes the work.