Tag: Project Management Professional (PMP) Exam Practice

Project Management Professional (PMP) Exam Practice – Question1442

A revised cost baseline may be required in cost control when______________


A. CVs are severe, and a realistic measure of performance is needed
B. Updated cost estimates are prepared and distributed to stakeholders
C. Corrective action must be taken to bring expected future performance in line with the project plan EAC shows that additional funds are needed to complete the project even if a scope change is not needed

Correct Answer: A

Explanation:

Explanation:
After the CVs exceed certain ranges, the original project budget may be questioned and changed as a result of new information.

Project Management Professional (PMP) Exam Practice – Question1441

Increased attention to return on investment (ROI) now requires you to complete a financial analysis of the payback period on your project. Such an analysis identifies the______________


A. Ratio of discounted revenues over discounted costs
B. Future value of money invested today
C. Amount of time before net cash flow becomes positive
D. Point in time where costs exceed profit

Correct Answer: C

Explanation:

Explanation:
Payback period analysis determines the time required for a project to recover the investment in it and become profitable. A weakness of this approach is a lack of emphasis on the magnitude of the profitability.

Project Management Professional (PMP) Exam Practice – Question1440

The method of calculating the EAC by assuming the ETC work will be performed at the same cumulative CPI incurred by the project to date is used most often when______________


A. Current variances are viewed as atypical ones
B. Original estimating assumptions are no longer reliable because conditions have changed
C. Current variances are viewed as typical of future variances
D. Original estimating assumptions are considered to be fundamentally flawed

Correct Answer: C

Explanation:

Explanation:
Past performance is indicative of future performance; therefore, EAC = BAC/CPI.

Project Management Professional (PMP) Exam Practice – Question1439

According to learning curve theory, when many items are produced repetitively______________


A. Unit costs decrease geometrically as production rates increase linearly
B. Unit costs decrease as production rates increase
C. Unit costs decrease in a regular pattern as more units are produced
D. Costs of training increase as the level of automation increases

Correct Answer: C

Explanation:

Explanation:
Learning curve theory indicates that human performance usually improves when a task is repeated. Specifically, each time output doubles, worker hours per unit decrease by a fixed percentage. This percentage is called the learning rate. Meredith and Mantel
2012, 301-303

Project Management Professional (PMP) Exam Practice – Question1438

Overall cost estimates must be allocated to individual activities to establish the cost performance baseline. In an ideal situation, a project manager would prefer to prepare estimates______________


A. Before the budget is complete
B. After the budget is approved by management
C. Using a parametric estimating technique and model specific for that project type
D. Using a bottom-up estimating technique

Correct Answer: A

Explanation:

Explanation:
Often project cost estimates are prepared after budgetary approval is provided. However, activity cost estimates should be prepared before the budget is complete.

Project Management Professional (PMP) Exam Practice – Question1437

Performance review meetings are held to assess schedule activity and work packages over-running or under-running the budget and to determine any estimated funds needed to complete work in progress. Typically, if EV is being used, all but which of the
following information is determined?


A. Variance analysis
B. Trend analysis
C. Time reporting systems
D. Earned value performance

Correct Answer: C

Explanation:

Explanation:
Variance analysis focuses on cost and schedule to help explain the cause, issue, and corrective action. Trend analysis examines project performance over time to determine performance status. Earned value performance compares the performance
measurement baseline to actual schedule and cost performance.

Project Management Professional (PMP) Exam Practice – Question1436

Control 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 reported

Correct Answer: D

Explanation:

Explanation:
Control accounts represent a management control point where scope, budget (resource plans), actual costs, and schedule are integrated and compared to earned value for performance measurement.

Project Management Professional (PMP) Exam Practice – Question1435

By reviewing cumulative cost curves, the project manager can monitor______________


A. EV
B. PV
C. CVs
D. CPI

Correct Answer: C

Explanation:

Explanation:
Cumulative cost curves, or S-curves, enable the project manager to monitor cost variances at a glance. The difference in height between the planned-expenditure curve and the actual-expenditure curve represents the monetary value of variances at any given
time.

Project Management Professional (PMP) Exam Practice – Question1434

Typically, the statement "no one likes to estimate, because they know their estimate will be proven incorrect" is true. However, you have been given the challenge of estimating the costs for your nuclear reactor project. A basic assumption that you need to make
early in this is______________


A. How direct and indirect costs will be handled
B. Whether or not experts will be available to assist you in this process
C. If there will be a multiyear project budget
D. Whether the project has required delivery dates

Correct Answer: A

Explanation:

Explanation:
The scope statement, as part of the scope baseline, is a key input in the estimate costs process and should be reviewed. It provides the project description, acceptance criteria, key deliverables, boundaries, assumptions, and constraints about the project. It also
notes one basic assumption that must be made as costs are estimated is whether the estimates will be limited only to direct project costs or whether they also will include indirect project costs.

Project Management Professional (PMP) Exam Practice – Question1433

Which of the following calculations CANNOT be used to determine EAC?


A. EV to date plus the remaining project budget
B. Accepts actual costs and predicts future ETC work will be done at the budgeted rate
C. Assumes what the program has experienced can be expected to continue
D. ETC will be performed at an efficiency rate considering both the CPI and SPI

Correct Answer: A

Explanation:

Explanation:
EAC is a forecast of the most likely total value based on project performance and risk quantification. To calculate EAC, the AC of a project must be known and used in the calculation. Any calculation that relies solely on the EV will not yield an accurate measure of
cost performance.