Question 1

What are the three basic types of cost estimating? Describe each type.

Accepted Answer

The three basic types of cost estimating...

Question 2

The timeframe for a(n) _____ estimate is often three or more years prior to project completion.

Accepted Answer

rough orde...

Question 3

Which of the following is most likely to be a reason for inaccuracies in information technology cost estimates?

Accepted Answer

A)  Estimates take a long time to be worked out. 
B)  People lack estimating experience. 
C)  Human beings are biased toward overestimation. 
D)  Only software development provides the scope for estimates to be accurate.

Question 4

Analogous estimates are the most accurate technique to estimate costs.

Accepted Answer

A) True 
 B)False

Question 5

A budgetary estimate is the most accurate of the three types of estimates.

Accepted Answer

A) True 
 B)False

Question 6

Describe three tools used in developing a good cost estimate.

Accepted Answer

Several tools and techniques can be used to create a cost estimate. Three of such tools are as follows:
(1) Analogous estimates: They use the actual cost of a previous, similar project as the basis for estimating the cost of the current project. This technique requires a good deal of expert judgment and is generally less costly than other techniques, but it is also less accurate. Analogous estimates are most reliable when the previous projects are similar in fact, not just in appearance. In addition, the groups preparing cost estimates must have the needed expertise to determine whether certain parts of the project will be more or less expensive than analogous projects.
(2) Bottom-up estimates: They involve estimating the costs of individual work items or activities and summing them to get a project total. This approach is sometimes referred to as activity-based costing. The size of the individual work items and the experience of the estimators drive the accuracy of the estimates. Using smaller work items increases the accuracy of the cost estimate because the people assigned to do the work develop the cost estimate instead of someone unfamiliar with the work. The drawback with bottom-up estimates is that they are usually time-intensive and therefore expensive to develop.
(3) Parametric estimating: They use project characteristics (parameters) in a mathematical model to estimate project costs. Parametric models are most reliable when the historical information used to create the model is accurate, the parameters are readily quantifiable, and the model is flexible in terms of the project's size.

Question 7

The _____ is based on the original planned costs for the project or activity and the rate at which the team is completing work on the project or activity to date.

Accepted Answer

The answer of The _____ is based on the original...

Question 8

In an earned value chart, when the actual cost line is right on or above the earned value line, it indicates that costs are less than planned.

Accepted Answer

A) True 
 B)False

Question 9

Profits may be defined as:

Accepted Answer

A)  expenses plus net income.
B)  costs plus revenues. 
C)  revenues plus expenses.
D)  revenues minus expenditures.

Question 10

Schedule variance is:

Accepted Answer

A)  the earned value minus the planned value. 
B)  the earned value minus the actual cost. 
C)  the planned value plus the earned value. 
D)  the planned value plus the rate of performance. A

Question 11

The main outputs of the _____ process are activity cost estimates, basis of estimates, and project document updates.

Accepted Answer

cost estimating

Question 12

Estimates should become more accurate as time progresses.

Accepted Answer

A) True 
 B)False

Question 13

Budgetary estimates are made even before a project is officially started.

Accepted Answer

A) True 
 B)False

Question 14

The _____ is the portion of the approved total cost estimate planned to be spent on an activity during a given period.

Accepted Answer

The answer of The _____ is the portion of the...

Question 15

Supporting details for an estimate include the ground rules and assumptions used in creating the estimate.

Accepted Answer

A) True 
 B)False

Question 16

A(n) _____ estimate is done very early in a project or even before a project is officially started.

Accepted Answer

rough orde...

Question 17

Contingency reserves are also known as unknown unknowns.

Accepted Answer

A) True 
 B)False

Question 18

Cost variance is:

Accepted Answer

A)  the planned value plus actual costs. 
B)  the earned value minus the actual cost. 
C)  the rate of performance minus earned value. 
D)  the planned value minus the rate of performance.

Question 19

Variances are calculated by subtracting the actual cost from _____.

Accepted Answer

A)  earned value
B)  schedule variance  
C)  planned value
D)  rate of performance

Question 20

What are tangible and intangible costs? Distinguish between direct and indirect costs and give examples of each.

Accepted Answer

Tangible and intangible costs and benefi...

Exam 7: Project Cost Management

What are the three basic types of cost estimating? Describe each type.

Correct Answer
verified
The three basic types of cost estimating...
View Answer

The timeframe for a(n) _____ estimate is often three or more years prior to project completion.

Correct Answer
verified
rough orde...
View Answer

Which of the following is most likely to be a reason for inaccuracies in information technology cost estimates?

Correct Answer
verified

Analogous estimates are the most accurate technique to estimate costs.

Correct Answer
verified

A budgetary estimate is the most accurate of the three types of estimates.

Correct Answer
verified

Describe three tools used in developing a good cost estimate.

The _____ is based on the original planned costs for the project or activity and the rate at which the team is completing work on the project or activity to date.

Correct Answer
verified

In an earned value chart, when the actual cost line is right on or above the earned value line, it indicates that costs are less than planned.

Correct Answer
verified

Profits may be defined as:

Correct Answer
verified

Schedule variance is:

Correct Answer
verified
A

The main outputs of the _____ process are activity cost estimates, basis of estimates, and project document updates.

Correct Answer
verified
cost estimating

Estimates should become more accurate as time progresses.

Correct Answer
verified

Budgetary estimates are made even before a project is officially started.

Correct Answer
verified

The _____ is the portion of the approved total cost estimate planned to be spent on an activity during a given period.

Correct Answer
verified

Supporting details for an estimate include the ground rules and assumptions used in creating the estimate.

Correct Answer
verified

A(n) _____ estimate is done very early in a project or even before a project is officially started.

Correct Answer
verified
rough orde...
View Answer

Contingency reserves are also known as unknown unknowns.

Correct Answer
verified

Cost variance is:

Correct Answer
verified

Variances are calculated by subtracting the actual cost from _____.

Correct Answer
verified

What are tangible and intangible costs? Distinguish between direct and indirect costs and give examples of each.

Correct Answer
verified
Tangible and intangible costs and benefi...
View Answer

Exam 7: Project Cost Management

What are the three basic types of cost estimating? Describe each type.

Correct AnswerverifiedThe three basic types of cost estimating...View AnswerShow Answer

The timeframe for a(n) _____ estimate is often three or more years prior to project completion.

Correct Answerverifiedrough orde...View AnswerShow Answer

Which of the following is most likely to be a reason for inaccuracies in information technology cost estimates?

Correct AnswerverifiedShow Answer

Analogous estimates are the most accurate technique to estimate costs.

Correct AnswerverifiedShow Answer

A budgetary estimate is the most accurate of the three types of estimates.

Correct AnswerverifiedShow Answer

Describe three tools used in developing a good cost estimate.

The _____ is based on the original planned costs for the project or activity and the rate at which the team is completing work on the project or activity to date.

Correct AnswerverifiedShow Answer

In an earned value chart, when the actual cost line is right on or above the earned value line, it indicates that costs are less than planned.

Correct AnswerverifiedShow Answer

Profits may be defined as:

Correct AnswerverifiedShow Answer

Schedule variance is:

Correct AnswerverifiedA

The main outputs of the _____ process are activity cost estimates, basis of estimates, and project document updates.

Correct Answerverifiedcost estimating

Estimates should become more accurate as time progresses.

Correct AnswerverifiedShow Answer

Budgetary estimates are made even before a project is officially started.

Correct AnswerverifiedShow Answer

The _____ is the portion of the approved total cost estimate planned to be spent on an activity during a given period.

Correct AnswerverifiedShow Answer

Supporting details for an estimate include the ground rules and assumptions used in creating the estimate.

Correct AnswerverifiedShow Answer

A(n) _____ estimate is done very early in a project or even before a project is officially started.

Correct Answerverifiedrough orde...View AnswerShow Answer

Contingency reserves are also known as unknown unknowns.

Correct AnswerverifiedShow Answer

Cost variance is:

Correct AnswerverifiedShow Answer

Variances are calculated by subtracting the actual cost from _____.

Correct AnswerverifiedShow Answer

What are tangible and intangible costs? Distinguish between direct and indirect costs and give examples of each.

Correct AnswerverifiedTangible and intangible costs and benefi...View AnswerShow Answer

Correct Answer
verified
The three basic types of cost estimating...
View Answer

Correct Answer
verified
rough orde...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A

Correct Answer
verified
cost estimating

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
rough orde...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Tangible and intangible costs and benefi...
View Answer