Question 1

How can you handle changes in the project budget?

Accepted Answer

The best approach to handle changes in a

Question 2

According to the Oxford Review of Economic Policy, a study of 258 projects in 20 countries showed that projects are rarely over budget if they are well managed.

Accepted Answer

A) True 
 B)False

Question 3

The first unit required 6 hours. If the industry uses a 90 percent learning rate, how long should the fourth unit take?

Accepted Answer

A)  6 hours 
B)  4.86 hours 
C)  3.75 hours 
D)  3.34 hours 
E)  2.67 hours 
A)  6 hours 
B)  4.86 hours 
C)  3.75 hours 
D)  3.34 hours 
E)  2.67 hours

Question 4

The project budget acts as a project control.

Accepted Answer

A) True 
 B)False

Question 5

Because project budgeting is for a special case and the organization's budgeting process is for routine work, the project manager need not be familiar with the organization's accounting system.

Accepted Answer

A) True 
 B)False

Question 6

Samuel, a project manager, and Martha, his subordinate, are working on a project. In the budgeting phase, Samuel is responsible for estimating the costs for Level 1 tasks and Martha is responsible for estimating the costs for Level 2 tasks. While collating the data, Samuel finds that the total estimated cost for Level 1 tasks is much lower than the total estimated cost for Level 2 tasks. Which of the following is a reason for this discrepancy?

Accepted Answer

A)  Subordinates tend to have more experience than higher management in allocating costs. 
B)  Project managers are naturally pessimistic and want to build in protection for everything that might possibly go wrong. 
C)  Subordinates are usually optimistic and never admit that details have been forgotten or that anything can or will go wrong. 
D)  Jobs always look easier, faster, and cheaper to the project manager than to the subordinates who have to do them. 
E)  Project managers and subordinates are often dishonest in their estimations. 
A)  Subordinates tend to have more experience than higher management in allocating costs. 
B)  Project managers are naturally pessimistic and want to build in protection for everything that might possibly go wrong. 
C)  Subordinates are usually optimistic and never admit that details have been forgotten or that anything can or will go wrong. 
D)  Jobs always look easier, faster, and cheaper to the project manager than to the subordinates who have to do them. 
E)  Project managers and subordinates are often dishonest in their estimations.

Question 7

The project's budget is merely the sum of its resource costs.

Accepted Answer

A) True 
 B)False

Question 8

Budget cuts are usually disastrous to an exponential life-cycle project.

Accepted Answer

A) True 
 B)False

Question 9

Overhead and GS&A are rarely an issue when a project runs late.

Accepted Answer

A) True 
 B)False

Question 10

Organizations can use both top-down and bottom-up budgeting.

Accepted Answer

A) True 
 B)False

Question 11

Overhead and indirect charges should not be assigned to a project.

Accepted Answer

A) True 
 B)False

Question 12

A disaster is an event that may have an extraordinarily high cost if it occurs, but has a very low probability of occurring.

Accepted Answer

A) True 
 B)False

Question 13

Define top-down and bottom-up budgeting.

Accepted Answer

Budgeting is the process of forecasting

Question 14

There is a 30 percent chance that a new product development project will result in sales of $500,000 and a 70 percent chance that the project will result in sales of $100,0What is the expected value of this project?

Accepted Answer

A)  $220,000 
B)  $240,000 
C)  $300,000 
D)  $320,000 
E)  $340,000 
A)  $220,000 
B)  $240,000 
C)  $300,000 
D)  $320,000 
E)  $340,000

Question 15

For projects with S-shaped life cycles, the top-down budgeting process is never acceptable.

Accepted Answer

A) True 
 B)False

Question 16

Explain how uncertainty regarding the budget changes as a project progresses.

Accepted Answer

In spite of the care and effort expended

Question 17

After major risk are identified which of the following data should NOT be obtained for analysis

Accepted Answer

A)  probability of each risk occurring 
B)  Range or distribution of possible outcomes 
C)  probability of each outcome 
D)  the expected time of each outcome 
E)  the person responsible for each outcome 
A)  probability of each risk occurring 
B)  Range or distribution of possible outcomes 
C)  probability of each outcome 
D)  the expected time of each outcome 
E)  the person responsible for each outcome

Question 18

Bottom-up budgets are usually more accurate in the detailed tasks.

Accepted Answer

A) True 
 B)False

Question 19

The learning curve states that each time the output doubles, the worker hours per unit increase by a fixed percentage of their previous value.

Accepted Answer

A) True 
 B)False

Question 20

There is no way other than guessing to estimate the impact of learning on a project's task.

Accepted Answer

A) True 
 B)False

How can you handle changes in the project budget?

According to the Oxford Review of Economic Policy, a study of 258 projects in 20 countries showed that projects are rarely over budget if they are well managed.

The first unit required 6 hours. If the industry uses a 90 percent learning rate, how long should the fourth unit take?

The project budget acts as a project control.

Because project budgeting is for a special case and the organization's budgeting process is for routine work, the project manager need not be familiar with the organization's accounting system.

The project's budget is merely the sum of its resource costs.

Budget cuts are usually disastrous to an exponential life-cycle project.

Overhead and GS&A are rarely an issue when a project runs late.

Organizations can use both top-down and bottom-up budgeting.

Overhead and indirect charges should not be assigned to a project.

A disaster is an event that may have an extraordinarily high cost if it occurs, but has a very low probability of occurring.

Define top-down and bottom-up budgeting.

There is a 30 percent chance that a new product development project will result in sales of $500,000 and a 70 percent chance that the project will result in sales of $100,0What is the expected value of this project?

For projects with S-shaped life cycles, the top-down budgeting process is never acceptable.

Explain how uncertainty regarding the budget changes as a project progresses.

After major risk are identified which of the following data should NOT be obtained for analysis

Bottom-up budgets are usually more accurate in the detailed tasks.

The learning curve states that each time the output doubles, the worker hours per unit increase by a fixed percentage of their previous value.

There is no way other than guessing to estimate the impact of learning on a project's task.

The World of Project Management

The Manager, the Organization, and the Team

Planning the Project

Scheduling the Project

Allocating Resources to the Project

Monitoring and Controlling the Project

Evaluating and Terminating the Project

Filters

Exam 4: Budgeting the Project

How can you handle changes in the project budget?

According to the Oxford Review of Economic Policy, a study of 258 projects in 20 countries showed that projects are rarely over budget if they are well managed.

The first unit required 6 hours. If the industry uses a 90 percent learning rate, how long should the fourth unit take?

The project budget acts as a project control.

Because project budgeting is for a special case and the organization's budgeting process is for routine work, the project manager need not be familiar with the organization's accounting system.

The project's budget is merely the sum of its resource costs.

Budget cuts are usually disastrous to an exponential life-cycle project.

Overhead and GS&A are rarely an issue when a project runs late.

Organizations can use both top-down and bottom-up budgeting.

Overhead and indirect charges should not be assigned to a project.

A disaster is an event that may have an extraordinarily high cost if it occurs, but has a very low probability of occurring.

Define top-down and bottom-up budgeting.

There is a 30 percent chance that a new product development project will result in sales of $500,000 and a 70 percent chance that the project will result in sales of $100,0What is the expected value of this project?

For projects with S-shaped life cycles, the top-down budgeting process is never acceptable.

Explain how uncertainty regarding the budget changes as a project progresses.

After major risk are identified which of the following data should NOT be obtained for analysis

Bottom-up budgets are usually more accurate in the detailed tasks.

The learning curve states that each time the output doubles, the worker hours per unit increase by a fixed percentage of their previous value.

There is no way other than guessing to estimate the impact of learning on a project's task.

The World of Project Management

The Manager, the Organization, and the Team

Planning the Project

Scheduling the Project

Allocating Resources to the Project

Monitoring and Controlling the Project

Evaluating and Terminating the Project

Filters