Module 7 - Chat GBT.pdf

1. What is the main objective of a Cost Management Plan? - A) To manage project risks - B) To determine project quality standards - C) To develop and control the project budget - D) To allocate resources Correct Answer: C 2. Which of the following is a unit of measure commonly used in cost managem...

1. What is the main objective of a Cost Management Plan? - A) To manage project risks - B) To determine project quality standards - C) To develop and control the project budget - D) To allocate resources Correct Answer: C 2. Which of the following is a unit of measure commonly used in cost management? - A) Earned Value - B) Dollars or staff hours - C) Stakeholder engagement - D) Milestones Correct Answer: B 3. What does the "level of accuracy" in a cost estimate indicate? - A) The methodology used for estimating costs - B) The confidence level in the estimated value, typically expressed as a percentage range - C) The number of stakeholders involved - D) The project scope Correct Answer: B 4. What type of cost includes office rent, which remains constant regardless of the project size? - A) Variable cost - B) Direct cost - C) Fixed cost - D) Sunk cost Correct Answer: C 5. What are sunk costs? - A) Costs that vary with project parameters - B) Costs already spent that cannot be recovered - C) Costs that are directly attributable to the project - D) Fixed costs that recur monthly Correct Answer: B 6. Which of the following is an example of a direct cost? - A) Office supplies - B) Salaries of team members working exclusively on the project - C) Indirect overhead costs - D) Project insurance premiums Correct Answer: B 7. Which estimating approach uses data from similar past projects to estimate current project costs? - A) Bottom-up estimating - B) Parametric estimating - C) Analogous estimating - D) Three-point estimating Correct Answer: C 8. Which estimating technique involves calculating cost by multiplying parameters like quantity by rate? - A) Analogous estimating - B) Parametric estimating - C) Expert judgment - D) Bottom-up estimating Correct Answer: B 9. What is a primary disadvantage of analogous estimating? - A) Requires a lot of time to prepare - B) Needs very detailed information about each activity - C) May be inaccurate if there is a lack of similar past projects - D) Too costly to implement Correct Answer: C 10. In three-point estimating, what does "cM" represent? - A) Optimistic cost - B) Most likely cost - C) Pessimistic cost - D) Average cost Correct Answer: B 11. What is the formula for calculating the expected cost using the beta distribution in three-point estimating? - A) (cO + cM + cP) / 3 - B) (cO + 4cM + cP) / 6 - C) cM × (cO + cP) - D) (cP - cO) + cM Correct Answer: B 12. What type of estimate provides a cost range of -25% to +75% accuracy? - A) Definitive estimate - B) Budgetary estimate - C) Rough Order of Magnitude (ROM) estimate - D) Analogous estimate Correct Answer: C 13. When is a definitive estimate typically prepared? - A) Before the start of the project - B) During initiation phase - C) Just before execution, after planning is complete - D) At project closeout Correct Answer: C 14. What is the purpose of a cost baseline in project management? - A) To identify stakeholders - B) To serve as the budget for measuring and controlling cost performance - C) To allocate project resources - D) To define the project scope Correct Answer: B 15. Which of the following is a time-phased budget used to monitor and control project costs? - A) Risk register - B) Cost baseline - C) Work Breakdown Structure (WBS) - D) Scope statement Correct Answer: B 16. What type of cost is associated with ongoing maintenance after the project's completion? - A) Sunk cost - B) Variable cost - C) Operational cost - D) Capital cost Correct Answer: C 17. What does Earned Value Management (EVM) help project managers measure? - A) Quality of project deliverables - B) Project team skills - C) Project performance and progress against the budget - D) Stakeholder satisfaction Correct Answer: C 18. Which term refers to the amount of money added to a budget to cover known risks with active response strategies? - A) Contingency reserves - B) Sunk costs - C) Management reserves - D) Direct costs Correct Answer: A 19. What is a characteristic of management reserves? - A) Included in the cost baseline - B) Allocated for unforeseen work within the scope of the project - C) Estimated using parametric estimating - D) Used for purchasing equipment Correct Answer: B 20. Which type of estimating involves breaking down the project into smaller components and estimating each one individually? - A) Analogous estimating - B) Parametric estimating - C) Bottom-up estimating - D) Three-point estimating Correct Answer: C 21. What is an advantage of using bottom-up estimating? - A) It is inexpensive and quick - B) It requires little to no project detail - C) It provides a very accurate cost estimate - D) It is based on similar projects Correct Answer: C 22. Which estimating technique is most suitable when project details are not yet finalized? - A) Definitive estimating - B) Parametric estimating - C) Rough Order of Magnitude (ROM) estimating - D) Bottom-up estimating Correct Answer: C 23. Which of the following describes opportunity cost? - A) The cost of additional resources - B) The cost of an alternative that is forgone to pursue a certain action - C) The cost of meeting regulatory requirements - D) The cost already expended on a project Correct Answer: B 24. What is Parkinson’s Law in the context of project management? - A) Work expands to fill the time available for its completion - B) The more resources you allocate, the shorter the project duration - C) Work decreases as resources increase - D) Costs increase over time with project complexity Correct Answer: A 25. Which type of cost estimating is described as "involving a mathematical model to estimate project costs"? - A) Analogous estimating - B) Parametric estimating - C) Three-point estimating - D) Expert judgment Correct Answer: B 26. What is the primary purpose of the cost aggregation process? - A) To estimate the total cost of work packages - B) To determine the cost of resources - C) To compile individual cost estimates into a total project cost - D) To monitor expenses Correct Answer: C 27. Which of the following reserves is typically not part of the project cost baseline? - A) Management reserves - B) Contingency reserves - C) Overhead costs - D) Control accounts Correct Answer: A 28. What does the S-curve represent in project cost management? - A) The project's critical path - B) Cumulative cost, labor hours, or quantities over time - C) The project schedule in a Gantt format - D) The project's scope and deliverables Correct Answer: B 29. What is the definition of "fixed cost"? - A) Costs that vary depending on project activities - B) Costs that remain constant regardless of the size of the project - C) Costs incurred directly by the project team - D) Costs that are recoverable after the project's completion Correct Answer: B 30. In the context of cost estimating, what does "level of precision" refer to? - A) The method used to measure costs - B) The extent to which estimates are rounded (e.g., to the nearest thousand) - C) The confidence level in stakeholder feedback - D) The number of team members involved Correct Answer: B 31. What is a primary benefit of using historical databases in cost estimating? - A) It increases the accuracy of estimates by leveraging past project data - B) It eliminates the need for contingency reserves - C) It reduces the scope of the project - D) It automates the project planning process Correct Answer: A 32. What is the function of a cost baseline in project management? - A) To allocate project tasks - B) To measure, monitor, and control overall project cost performance - C) To identify risks in the project - D) To evaluate team performance Correct Answer: B 33. Which of the following tools helps manage cost performance throughout the project lifecycle? - A) Cost baseline - B) Work Breakdown Structure (WBS) - C) Gantt Chart - D) Stakeholder Register Correct Answer: A 34. In Agile, what is an item in the product backlog that estimates the effort required called? - A) User story - B) Work package - C) Sprint goal - D) Feature Correct Answer: A 35. What is the purpose of resource leveling? - A) To accelerate project completion by adding more resources - B) To ensure resource demand does not exceed availability - C) To prioritize activities on the critical path - D) To eliminate unnecessary project tasks Correct Answer: B 36. Which estimating approach can be done at any point during the project? - A) Bottom-up estimating - B) Analogous estimating - C) Parametric estimating - D) Rough Order of Magnitude (ROM) estimating Correct Answer: C 37. What are indirect costs in project management? - A) Costs incurred directly from project activities - B) Costs related to the general operation of the business, allocated to the project - C) Costs associated with purchasing equipment for the project - D) Costs that vary based on the amount of work done Correct Answer: B 38. Which type of costs are constant and do not change with the project’s size or scope? - A) Variable costs - B) Indirect costs - C) Fixed costs - D) Direct costs Correct Answer: C 39. What is the main risk of using top-down (analogous) estimating? - A) Lack of stakeholder involvement - B) Inaccuracy if there is no historical data for comparison - C) Excessive project scope - D) Limited use in Agile projects Correct Answer: B 40. Which type of estimate is used to put dollars in the budget plan during early to mid-planning? - A) Rough Order of Magnitude (ROM) - B) Budgetary estimate - C) Definitive estimate - D) Top-down estimate Correct Answer: B 41. What type of estimate is typically the most accurate? - A) Analogous estimate - B) Rough Order of Magnitude (ROM) estimate - C) Bottom-up estimate - D) Parametric estimate Correct Answer: C 42. What is "cost aggregation" in project management? - A) Breaking down work packages for better estimation - B) Adding resource costs over time to create a cumulative total - C) Identifying stakeholders for cost approval - D) Listing all project risks Correct Answer: B 43. What role do contingency reserves play in the project budget? - A) Cover project management salaries - B) Provide funding for unknown risks within the scope of the project - C) Allow for additional profit - D) Fund the project scope changes Correct Answer: B 44. What type of estimating is "bottom-up estimating"? - A) A method that breaks down individual work activities to estimate total project cost - B) A method using historical data to estimate costs - C) A method that requires expert judgment for all estimates - D) A method for comparing current estimates with similar projects Correct Answer: A 45. Which estimating technique uses parameters like size, weight, or complexity as inputs to determine cost estimates? - A) Parametric estimating - B) Analogous estimating - C) Bottom-up estimating - D) Three-point estimating Correct Answer: A 46. What does a cost baseline typically include? - A) Management reserves - B) Contingency reserves and work package estimates - C) The entire project budget including profit - D) Only direct costs Correct Answer: B 47. In resource planning, what type of resources must be considered? - A) People, equipment, facilities, and materials - B) Only human resources - C) Marketing and sales staff - D) Financial resources Correct Answer: A 48. Which estimating method allows you to quickly compare items in a product backlog to each other to assign sizes? - A) Bottom-up estimating - B) Analogous estimating - C) Relative estimating - D) Definitive estimating Correct Answer: C 49. What are "control accounts" in project management? - A) Accounts used for tracking direct costs only - B) Management control points where scope, budget, actual cost, and schedule are integrated - C) Accounts used to allocate team member payments - D) Accounts for project profit calculation Correct Answer: B 50. What is the main purpose of the S-curve in project cost management? - A) To visualize project milestones - B) To measure cumulative cost performance over time - C) To assign tasks to project members - D) To create a Work Breakdown Structure Correct Answer: B