Cost Management

Question 1

Funding Limit Reconciliation

Answer 1

adjustments made to project expenditures to account for funding limits (e.g. quarterly budgets)

Question 2

Cost Baseline

Answer 2

Authorized, time-phased, total project Budget used to measure, monitor and control cost performance of the project; appears as an S-curve on a graph

Question 3

Variance Analysis

Answer 3

measuring the difference between planned and actual (used for both costs and durations)

Question 4

Earned Value Management (EVM)

Answer 4

an objective mathematical approach to measure cost and schedule performance

Question 5

Contingency Reserves

Answer 5

amounts set aside by PM to cover known risks (included in Cost Baseline)

Question 6

Management Reserves

Answer 6

amounts management sets aside to cover unknown risks (not included in Cost Baseline)

Question 7

Net Present Value (NPV)

Answer 7

the present value of a future income stream, offset against initial investment amount

Question 8

Benefit-Cost Ratio

Answer 8

compares financial yield to the cost of doing the project

Question 9

Payback Period

Answer 9

the amount of time needed to recoup the project’s investment