Cost

Question 1

Plan Cost Management

Answer 1

how the cost will be estimated, budgeted, managed, monitored and controlled.

Question 2

Plan Cost Management

Benefit

Answer 2

provides guidance and direction on how the project cost will be managed

Question 3

Plan Cost Management

Input

Answer 3

proj Charter

PMP: Schedule (impact cost est.); Risk (impact cost est and mgmt)

Question 4

Plan Cost Management

Output

Answer 4

cost management plan

Question 5

Plan Cost Management

TT

Answer 5

EDM

expert judgement, data analysis, meetings

Question 6

cost management plan

components

Answer 6

units of measure,
level of precision, 
level of accuracy, (range: 10%)
org procedure links (WBS control account #/code)
control thresholds (% deviation of baseline)
rules of performance measurement 
reporting formats (EVM)
additional details

Question 7

estimate cost

Answer 7

develop an approximation of the cost of the resources needed to complete the project

Question 8

estimate cost

benefit

Answer 8

determine the monetary resources required

Question 9

estimate cost

input

Answer 9

• COST (level of precision); QUA; Scope baseline (PSS, WBS, dictionary)
  Dos:
  Proj schedule, resource requirement, risk register

Question 10

estimate cost

out put

Answer 10

cost estimate

basis of estimate

Question 11

estimate cost

TT

Answer 11

E + D + PABT

D=data analysis: alternative, reserve, cost of quality

Question 12

determine budget

Answer 12

AGGREGATE the est. cost of individual activities or work package to establish the COST BASELINE

Question 13

determine budget

benefit

Answer 13

determines the COST BASELINE against which project performance can be monitored can controlled

Question 14

cost baseline

Answer 14

APPROVED version of time-phased project budget that includes CONTINGENCY RESERVES.
NOTE: EXCLUDES management reserve.
NOTE: If the project uses
earned value management (EVM), the cost baseline is
known as the performance measurement baseline.

Question 15

Cost Range

rough order of magnitude (ROM)

Answer 15

during initiation, a tolerance range for a rough order of magnitude (ROM) estimate could be

• 25% to +75%, and as the project work evolves into execution, the tolerance could narrow to
• 5% to +10%.

Question 16

determine budget

input

Answer 16

PMP: Cost, Resource, Scope baseline
Docs: cost est. basis of est. proj schedule, risk register
Aggreement

Question 17

determine budget

output

Answer 17

cost baseline

project funding requirements

Question 18

determine budget

TT

Answer 18

• cost aggregation
• historical info review
• funding limit reconciliation
• expert judgement
• data analysis: reserve
  (note: no estimation tools for determining budget)

Question 19

project funding requirements

Answer 19

periodical funding requirements derived from cost baseline. Occurs in incremental amounts, may not evenly distributed.

Question 20

control costs

Answer 20

monitor the status of project to update and manage changes to the cost baseline

Question 21

control costs

benefit

Answer 21

maintain the cost baseline

Question 22

control costs

input

Answer 22

• PMP: Cost MP, cost baseline, performance measurement baseline
• project funding requirements
• work performance data

Question 23

control costs

output

Answer 23

• work performance info
• COST FORECASTS
• change request
• PMP update: cost baseline

Question 24

control costs

TT

Answer 24

• EVTR (EVA, variance, trend, reserve)

- TCPI

Question 25

cost forecasts

Answer 25

Forecasts are estimates or predictions of the future state of the project based on past performance and expected future performance. EAC, ETC, VAC are documented and conveyed to stakeholders.

Question 26

Budget at Completion (BAC) | aka Performance Baseline

Answer 26

The amount the project is expected to cost. | Total PV

Question 27

``` Planned Value (PV) aka Budgeted Cost of Work Scheduled (BCWS) ```

Answer 27

The value of the work that should have been completed at a specific point in time, EXCLUDING any work started ahead of schedule

Question 28

``` Actual Cost (AC) aka Actual Cost of Work Performed (ACWP) ```

Answer 28

The cost of the work that has been completed at a specific point in time, including any work started ahead of schedule. regardless of its completion status (1% to 100%)

Question 29

``` Earned Value (EV) aka Budgeted Cost of Work Performed (BCWP) ```

Answer 29

A measurement of the project’s progress and the basis for cost analysis, including any work started ahead of schedule

Question 30

Schedule Performance Index (SPI)

Answer 30

EV / PV efficiency indicator, the amount of work done at a single point in time. e.g. SPI=0.67 means only 67% of the work scheduled to be done has been done

Question 31

Schedule Variance (SV)

Answer 31

EV - PV >0, the project is ahead of schedule. <0, the project is behind schedule.

Question 32

cost analysis

Answer 32

Cost analysis, at its most basic, is determining progress in terms of the amount of work completed (EV) versus what was paid to complete the work (AC). Using budget at completion, planned value, actual cost, and earned value, the CPI, CV, and TCPI can be determined.

Question 33

Cost Performance Index (CPI)

Answer 33

EV/AC An efficiency indicator that denotes the return on each dollar spent at a single point in time. e.g. CPI=0.5 means that 50 cents of project work is completed for every dollar spent.

Question 34

Cost Variance (CV)

Answer 34

EV-AC >0, the project is under budget. <0, the projectis over budget.

Question 35

Estimate at Completion (EAC) | based on the current spending efficiency (CPI)

Answer 35

EAC = BAC / CPI

Question 36

EAC forecast for ETC work performed at budgeted rate

Answer 36

EAC = AC + (BAC-EV)

Question 37

EAC forecast for manual, bottom-up ETC

Answer 37

EAC = AC + new/bottom-up ETC

Question 38

EAC forecast using CPI

Answer 38

EAC = AC + [(BAC – EV)/(CPI x SPI)]

Question 39

Variance at Completion (VAC)

Answer 39

VAC = BAC - EAC

Question 40

Present Value (PV)

Answer 40

amount of money needed now at the interest rate (r) for a desired future outcome (FV) over a number of periods (n). PV = FV/(1+R)n

Question 41

Future Value (FV)

Answer 41

FV = PV x (1+r)n

Question 42

Net Present Value | NPV

Answer 42

A value used in capital budgeting, in which the present value of cash inflow is subtracted from the present value of cash outflows; compares the value of a dollar today versus the value of that same dollar in the future, after taking inflation and return into account

Question 43

Internal Rate of Return (IRR)

Answer 43

A project comparison value; represents the discounted rate that ZEROs out the net present value (NPV)