1. You are creating your cost baseline. What process are you in?

A. Determine Budget

B. Control Costs

C. Estimate Costs

D. Cost Baselining

2. You’re working on a project that has an EV of $7,362 and a PV (BCWS) of $8,232. What’s your SV?
Note Some of the earned value numbers have alternate four-letter abbreviations. This one stands for
“budgeted cost of work scheduled.” Don’t worry—you don’t need to memorize them!

A. –$870

B. $870

C. 0.89

D. Not enough information to tell

3. You are managing a project for a company that has previously done three projects that were similar
to it. You consult with the cost baselines, lessons learned, and project managers from those projects,
and use that information to come up with your cost estimate. What technique are you using?

A. Parametric estimating

B. Net present value

C. Rough order of magnitude estimation

D. Analogous estimating

4. You are working on a project with a PV of $56,733 and an SPI of 1.2. What’s the earned value of your
project?

A. $68,079.60

B. $47,277.50

C. $68,733

D. .72
5. Your company has two projects to choose from. Project A is a billing software project for the Accounts
Payable department; in the end it will make the company around $400,000 when it has been rolled out
to all of the employees in that department. Project B is a payroll application that will make the company
around $388,000 when it has been put to use throughout the company. After a long deliberation, your
board chooses to go ahead with Project B. What is the opportunity cost for choosing Project B over
Project A?

A. $388,000

B. $400,000

C. $12,000

D. 1.2

6. Your company has asked you to provide a cost estimate that includes maintenance, installation,
support, and upkeep costs for as long as the product will be used. What is that kind of estimate called?

A. Benefit-cost ratio

B. Depreciation

C. Net present value

D. Lifecycle costing

7. You are working on a project with an SPI of .72 and a CPI of 1.1. Which of the following BEST describes
your project?

A. Your project is ahead of schedule and under budget.

B. Your project is behind schedule and over budget.

C. Your project is behind schedule and under budget.

D. Your project is ahead of schedule and over budget.

8. Your project has a BAC of $4,522 and is 13% complete. What is the earned value (EV)?

A. $3,934.14

B. There is not enough information to answer.

C. $587.86

D. $4,522
9. A project manager is working on a large construction project. His plan says that the project should end
up costing $1.5 million, but he’s concerned that he’s not going to come in under budget. He’s spent
$950,000 of the budget so far, and he calculates that he’s 57% done with the work, and he doesn’t think
he can improve his CPI above 1.05. Which of the following BEST describes the current state of the
project?

A. The project is likely to come in under budget.

B. The project is likely to exceed its budget.

C. The project is right on target.

D. There is no way to determine this information.

10. You are managing a project laying underwater fiber optic cable. The total cost of the project is
$52/meter to lay 4 km of cable across a lake. It’s scheduled to take eight weeks to complete, with an
equal amount of cable laid in each week. It’s currently the end of week 5, and your team has laid 1,800
meters of cable so far. What is the SPI of your project?

A. 1.16

B. 1.08

C. .92

D. .72

11. During the execution of a software project, one of your programmers informs you that she
discovered a design flaw that will require the team to go back and make a large change. What is the
BEST way to handle this situation?

A. Ask the programmer to consult with the rest of the team and get back to you with a
recommendation.

B. Determine how the change will impact the project constraints.

C. Stop all work and call a meeting with the sponsor.

D. Update the cost baseline to reflect the change.

12. If AC (ACWP) is greater than your EV (BCWP), what does this mean?

A. The project is under budget.

B. The project is over budget.

C. The project is ahead of schedule.

D. The project is behind schedule.

13. A junior project manager is studying for her PMP exam, and asks you for advice. She’s learning about
earned value management, and wants to know which of the variables represents the difference
between what you expect to spend on the project and what you’ve actually spent so far. What should
you tell her?

A. Actual cost (AC)

B. Cost performance index (CPI)

C. Earned value (EV)

D. Cost variance (CV)

14. You are managing an industrial architecture project. You’ve spent $26,410 so far to survey the site,
draw up preliminary plans, and run engineering simulations. You are preparing to meet with your
sponsor when you discover that there is a new local zoning law that will cause you to have to spend an
additional estimated $15,000 to revise your plans. You contact the sponsor and initiate a change request
to update the cost baseline.

What variable would you use to represent the $26,410 in an earned value calculation?

A. PV

B. BAC

C. AC

D. EV

15. You are working on the project plan for a software project. Your company has a standard
spreadsheet that you use to generate estimates. To use the spreadsheet, you meet with the team to
estimate the number of functional requirements, use cases, and design wireframes for the project. Then
you categorize them into high, medium, or low complexity. You enter all of those numbers into the
spreadsheet, which uses a data table derived from past projects’ actual costs and durations, performs a
set of calculations, and generates a final estimate. What kind of estimation is being done?

A. Parametric

B. Rough order of magnitude

C. Bottom-up

D. Analogous

16. Project A has an NPV of $75,000, with an internal rate of return of 1.5% and an initial investment of
$15,000. Project B has an NPV of $60,000 with a BCR of 2:1. Project C has an NPV of $80,000, which
includes an opportunity cost of $35,000. Based on these projects, which is the BEST one to select:

A. Project A

B. Project B

C. Project C

D. There is not enough information to select a project.

17. What is the range of a rough order of magnitude estimate?

A. –5% to +10%

B. –25% to +75%

C. –50% to +50%

D. –100% to +200%

18. You are managing a software project when one of your stakeholders needs to make a change that
will affect the budget. What defines the processes that you must follow in order to implement the
change?

A. Perform Integrated Change Control

B. Monitoring and Controlling process group

C. Change control board

D. Cost baseline

19. You are managing a software project when one of your stakeholders needs to make a change that
will affect the budget. You follow the procedures to implement the change. Which of the following must
get updated to reflect the change?

A. Project Management plan

B. Project cost baseline

C. Cost change control system

D. Project performance reviews

20. You are managing a project with a BAC of $93,000, EV (BCWP) of $51,840, PV (BCWS) of $64,800,
and AC (ACWP) of $43,200. What is the CPI? Note Again, don’t panic if you see these four-letter
abbreviations. You’ll always be given the ones you’re used to on the exam!

A. 1.5

B. 0.8

C. 1.2

D. $9,000

21. You are managing a project that has a TCPI of 1.19. What is the BEST course of action?

A. You’re under budget, so you can manage costs with lenience.

B. Manage costs aggressively.

C. Create a new schedule.

D. Create a new budget.

22. You are starting to write your project charter with your project sponsor when the senior managers
ask for a time and cost estimate for the project. You have not yet gathered many of the project details.
What kind of estimate can you give?

A. Analogous estimate

B. Rough order of magnitude estimate

C. Parametric estimate

D. Bottom-up estimate

23. You are managing a project for a defense contractor. You know that you’re over budget, and you
need to tell your project sponsor how much more money it’s going to cost. You’ve already given him a
forecast that represents your estimate of total cost at the end of the project, so you need to take that
into account. You now need to figure out what your CPI needs to be for the rest of the project. Which of
the following BEST meets your needs?

A. BAC

B. ETC

C. TCPI (BAC calculation)

D. TCPI (EAC calculation)

Exam Answers 1. Answer: A

This is really a question about the order of the processes. Control Costs uses the cost baseline, so it has
to be created before you get to it. Cost Baselining isn’t a process at all, so you should exclude that from
the choices right away. The main output of Determine Budget is the cost baseline and supporting detail,
so that’s the right choice here.

D. Cost Baselining Note Watch out for fake processes! This isn’t a real process name.

2. Answer: A

This one is just testing whether or not you know the formula for schedule variance. Just plug the values
into the SV formula: SV = EV – PV and you get answer A. Watch out for negative numbers, though!
Answer B is a trap because it’s a positive value. Also, the test will have answers like C that check if you’re
using the right formula. If you use the SPI formula, that’s the answer you’ll get! You can throw out D
right away —you don’t need to do any calculation to know that you have enough information to figure
out SV!

3. Answer: D

When you’re using the past performance of previous projects to help come up with an estimate, that’s
called analogous estimation. This is the second time you’ve seen this particular technique—it was also in
Chapter 6. So there’s a good chance that you’ll get an exam question on it.

4. Answer: A
The formula for SPI is: SPI = EV ÷ PV. So you just have to fill in the numbers that you know, which gets
you 1.2 = EV ÷ $56,733. Now flip it around. You end up with EV = 1.2 × $56,733, which multiplies out to
$68,079.60.

5. Answer: B Note Did you notice the red herring in the question? It didn’t matter what the projects
were about, only how much they cost!

If you see a question asking the opportunity cost of selecting one project over another, the answer is the
value of the project that was not selected! So even though the answers were all numbers, there’s no
math at all in this question.

6. Answer: D

This is one of those questions that gives you a definition and asks you to pick the term that’s being
defined. So which one is it?

Try using the process of elimination to find the right answer! It can’t be benefit-cost ratio, because you
aren’t being asked to compare the overall cost of the project to anything to figure out what its benefit
will be. Depreciation isn’t right—that’s about how your project loses value over time, not about its costs.
And it’s not net present value, because the question didn’t ask you about how much value your project
is delivering today. That leaves lifecycle costing. Note If you don’t know the answer to a question, try to
eliminate all the answers you know are wrong.

7. Answer: C Note Don’t forget: Lower = Loser!

When you see an SPI that’s lower than 1, that means your project is behind schedule. But your CPI is
above 1, which means that you’re ahead on your budget!

8. Answer: C

Use the formula: EV = BAC × actual % complete. When you plug the numbers into the formula, the right
answer pops out!

9. Answer: B

You might not have recognized this as a TCPI problem immediately, but take another look at the
question. It’s asking you whether or not a project is going to come in under budget, and that’s what TCPI
is for. Good thing you were given all of the values you need to calculate it! The actual % complete is
57%, the BAC is $1,500,000, and the AC is $950,000. You can calculate the EV = BAC × actual % complete
= $1,500,000 × 57% = $855,000. So now you have everything you need to calculate TCPI: this means he
needs a TCPI of 1.17 in order to come in under budget. Since he knows that he can’t get better than
1.05, he’s likely to blow the budget.

10. Answer: D

Some of these calculation questions can get a little complicated, but that doesn’t mean they’re difficult!
Just relax—you can do them!

The formula you need to use is: SPI = EV ÷ PV. But what do you use for EV and PV? If you look at the
question again, you’ll find everything you need to calculate them. First, figure out earned value: EV =
BAC × actual % complete. But wait! You weren’t given these in the question!
OK, no problem—you just need to think your way through it. The project will cost $52/meter to lay 4 km
(or 4,000 meters) of cable, which means the total cost of the project will be $52 × 4,000 = $208,000. And
you can figure out actual % complete too! You’ve laid 1,800 meters so far out of the 4,000 meters you’ll
lay in total…so that’s 1,800 ÷ 4,000 = 45% complete. All right! Now you know your earned value: EV =
$208,000 × 45% = $93,600.

So what’s next? You’ve got half of what you need for SPI—now you have to figure out PV. The formula
for it is: PV = BAC × scheduled % complete. So how much of the project were you supposed to complete
by now? You’re five weeks into an eightweek project, so 5 ÷ 8 = 62.5%. Your PV is $208,000 × 62.5% =
$130,000. Now you’ve got everything you need to calculate SPI! EV ÷ PV = $93,600 ÷ $130,000 = .72
Note Did you think that this was a red herring? It wasn’t—you needed all the numbers you were given.

11. Answer: B

You’ll run into a lot of questions like this where a problem happens, a person has an issue, or the project
runs into trouble. When this happens, the first thing you do is stop and gather information. And that
should make sense to you, since you don’t know if this change will really impact cost or not. It may seem
like a huge change to the programmer, but may not actually cost the project anything. Or it may really
be huge. So the first thing to do is figure out the impact of the change on the project constraints, and
that’s what answer B says!

12. Answer: B

What formula do you know that has AC and EV? Right: the CPI formula does! Take a look at it: CPI = EV ÷
AC. So what happens if AC is bigger than EV? Make up two numbers and plug them in. You get CPI that’s
below 1, and you know what that means…it means that you’ve blown your budget!

13. Answer: D

This question gave you a definition and is checking to see if you know what it refers to. You should take
a minute to look at the four possible answers and see if you can think of the definition for each of them.
It’s definitely worth taking the time to understand what each of these formulas and variables represents
in real life! It will make the whole exam a lot easier.

14. Answer: C

This is a classic red herring question! The money you’ve spent so far is the actual cost. It’s a simple
definition question, wrapped up in a whole bunch of fluff!

15. Answer: A

When you plug a bunch of values into a formula or computer program, and it generates an estimate,
that’s called parametric estimation. Parametric estimation often uses some historical data, but that
doesn’t mean it’s the same as analogous estimation.

16. Answer: C

You’ve been given a net present value (NPV) for each project. NPV means the total value that this
project is worth to your company. It’s got the costs—including opportunity costs—built in already. So all
you need to do is select the project with the biggest NPV.
17. Answer: B

The rough order of magnitude estimate is a very preliminary estimate that everyone knows is only
within an order of magnitude of the actual cost (or –25 to +75%).

18. Answer: A

You should definitely have a pretty good idea of how change control works by now! The change control
system defines the procedures that you use to carry out the changes. And Control Costs has its own set
of procedures, which are part of the Perform Integrated Change Control process you learned about in
Chapter 4.

19. Answer: B

You use the project cost baseline to measure and monitor your project’s cost performance. The idea
behind a baseline is that when a change is approved and implemented, the baseline gets updated.

20. Answer: C

You should have the hang of this by now! Plug the numbers into the formula (CPI = EV ÷ AC), and it spits
out the answer. Sometimes the question will give you more numbers than you actually need to use—
just ignore them like any other red herring and use only the ones you need!

21. Answer: B

If your TCPI is above 1, you need to manage costs aggressively. This means that you need to meet your
goals without spending as much money as you have been for the rest of the project.

22. Answer: B

If you are just starting to work on your project charter, it means you’re just starting the project and you
don’t have enough information yet to do analogous, parametric, or bottom-up estimates.

The only estimation technique that you can use that early in the project is the rough order of magnitude
estimate. That kind of estimate is not nearly as accurate as the other kinds of estimate and is used just
to give a rough idea of how much time and cost will be involved in doing a project.

23. Answer: D

This question may have seemed a little wordy, but it’s really just a question about the definition of TCPI.
You’re being asked to figure out where you need to keep your project’s CPI in order to meet your
budget. And you know it’s the EAC-based TCPI number, because the question specified that you already
gave him a forecast, which means you gave him an EAC value already. So now you can calculate the
EACbased TCPI number to figure out where you need to keep your CPI for the rest of the project. Note
By calculating this based on the EAC, you show your sponsor just how much money he needs to kick in
(or less, if you’ve got good news!) in order to come in under budget.