Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

PMP Questions > Cost > Flashcards

Cost Flashcards

0
Q

What is NPV?

A

NPV compares the value of a dollar today vs the value of the same dollar in the future after taking inflation and discount rate into account.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

What are 4 types of cost?

A

Direct cost: Cost directly attributable to the work of the project (salaries of coders)
Indirect cost: Cost indirectly attributable to work of the project (project building security cost)
Fixed cost: Consistent cost throughout the life of the project regardless of activity of project.
Variable cost: Cost that fluctuates with activity on project

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is ROI?

A

Return on Investment - Chose the biggest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is IRR?

A

Internal rate of return: NPV of all cash flow equal to zero.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is BCR?

A

Benefit to cost ratio: Compares benefit of project to cost. Usually want 1:1.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is Opportunity cost?

A

Cost associated with taking another oppty.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is payback period?

A

Payback period is the amount of time need to earn back the investment.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is future value?

A

The value of something (cash) at a point in the future - for ex. FV of 1000 invested at 8% for three years 1259.
FV=PV x (1.r) to the n power

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is present value? PV

A

Present value of something today that you need to create a certain amount of investment in the future.

PV= FV/(1+r) to the n power

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is sunk cost?

A

Cost that has been already spent on a project. Do not consider sunk cost when making project decisions.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is depreciation?

A

The process of devaluing a capital asset in the tax system. (Wear and tear on an asset)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How is standard depreciation calculated?

A

Starting value - Scrape value / timeframe

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is accelerated depreciation?

A

This allows a company / project to realize more depreciation sooner. Two types:
Sum of year digit
Double declining balance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is lifecyle costing (total cost of ownership)?

A

Process of examining all costs associated with a project.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is fixed formula progress reporting?

A

aka earned value rules. Technique that creates a consistent status report for project activities. Used for shorter duration not exceeding to reporting periods.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is weighted milestone?

A

Usu used for activities that are longer than two reporting periods. Work is divided into multiple milestones with a measurable output for each section.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is plan cost management?

A

Process used to create the cost mgmt plan.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What are inputs to Plan Cost Mgmt?

A

Project mgmt plan
Project charter
EEFs
OPAs

18
Q

What are tools and techs to Plan Cost Mgmt?

A

Expert judgement

Analytical techs

19
Q

What are inputs to Estimate Cost?

A 
Cost mgmt plan
HR plan
Scope baseline
Proj schedule
Risk register
20
Q

What are tools and techs to Estimate Cost?

A 
Expert judgement
Analogous estimating
Parametric estimating
Bottom up estimating
Three point estimating
Reserve analysis
Cost of quality
Vendor bid analysis
Proj mgmt software
21
Q

What is cost range?

A

Key principle in any environment is that the less is known earlier in proj the wider tolerance needed for project costs. (could be -25% to +75%)

22
Q

What are inputs to Determine Budget?

A 
Cost mgmt plan
Scope baseline
Activity cost est
Basis of est
Proj schedule
Resource calendars
Risk register
Agreements
23
Q

What are tool and techs to Estimate Cost?

A 
Cost aggregation
Reserve analysis
Expert judgement
Historical relationships
Funding limit reconciliation
24
Q

What are outputs to Estimate Cost?

A

Cost baseline

Report funding requirements

25
Q

What is chart of accounts?

A

List of accounts used by accounting to track budgets associated with project

26
Q

What is code of accounts?

A

Numbering system applied to project mgmt to identify individual pieces of work in the WBS.

27
Q

What are inputs to Control Costs?

A

Project mgmt plan
Proj funding reqs
Work performance data
OPAs

28
Q

What are tools and techs to Control Costs?

A 
Earned Value mgmt
Forecasting
TCPI (To complete performance index)
Performance review
PM software
Reserve analysis
29
Q

What is earned value management?

A

Technique for measuring the progress of a project by looking at its scope, schedule, and cost in an integrated manner.

30
Q

Types of earned value:

Budget at Completion?

A

Amount you expect the project to cost.

31
Q

Types of earned value:

What is planned value?

A

What is budgeted cost of the work scheduled?

32
Q

Types of earned value:
What is actual cost?
AC

A

Cost of work completed.

33
Q

Types of earned value:

What is earned value?

A

Measurement of progress of project including any work started ahead of schedule.

34
Q

Types of earned value:

What is schedule performance index?

A

EV/PV

An effeciency indicator that denote the amount of work done at a single point in time. If result is 1, work is on track.

35
Q

Types of earned value:
What is schedule variance?
SV

A

EV-PV

Denotes the difference between the value of the work completed and value of the work that should have been completed.

36
Q

Types of earned value:

Cost performance index (CPI)

A

EV/AC

Denotes the return on each dollar spent at a point in time. Result of 1 means project is on track.

37
Q

Types of earned value:

What is cost variance?

A

EV-AC

Denotes difference btw cost of work completed vs value of work completed. Result of 0 means project is on track.

38
Q

Forecasting: What is Estimate at Completion?

A

Current projected final cost based on the current spending efficiency.

EAC = BAC / CPI

39
Q

Forecasting: What is Estimate to Complete?

A

Amount needed to finish the project based on the current spending efficiency of the project.

ETC = EAC-AC

40
Q

Forecasting: What is Variance at Completion?

A

Difference between the budget at completion and estimate at completion.

VAC = BAC - EAC

41
Q

Forecasting: What is to complete performance index?

A

Effeciency needed from the remaining resources to meet the cost goals and finish on time.

TCPI = (BAC - EV) / (BAC - AC)

42
Q

What is S-Curve?

A

Graphic representation of interaction between cost, scope, and time over life of project.

PMP Questions (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions