QUESTION: 157

You work as a Project Manager for Tech Perfect Inc. You are looking for performance efficiencies of a project. The related key values are provided in the table below:

What will be the cost variance (CV) of the project at the current point of time?

+80
-80
-10
+10

Answer(s): B

Explanation:

According to the question, you are required to calculate the cost performance index (CPI) of the project. Cost variance (CV) is a measure of
cost performance on a project. The variance notifies if costs are higher than budgeted or lower than budgeted. The cost variance is calculated
based on the following formula:
CV = Earned Value (EV) - Actual Cost (AC)
A positive value means that spending is less than budgeted, whereas a negative value indicates that costs are higher than originally planned
for the project.
Now, putting the provided values in the formula:
CV = EV - AC
= 320 - 400
= -80
As the value of CV (which is -80) is negative, it shows that the costs are higher than that have been planned for the project.
What is BCWP (or EV)?
Budgeted cost of work performed (BCWP) or Earned Value (EV) is the value of completed work. It is the budgeted amount
for the work actually completed on the schedule activity during a given time period.
What is BCWS (or PV)?
Budgeted Cost of Work Scheduled (BCWS) or Planned Value (PV) is the authorized budget assigned to the scheduled work
to be accomplished for a schedule activity or Work Breakdown Structure (WBS) component.
What is ACWP (or AC)?
Actual cost of work performed (ACWP) or Actual Cost (AC) is the total costs actually incurred and recorded in accomplishing
work performed during a given time period for a schedule activity. It is the cost of the work to date, including direct and
indirect costs. AC is money that has actually been expended to date.

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QUESTION: 158

Amy works as a project manager for Blue Well Inc. She is working on the SDI project, which has a BAC of $2,816,000. She is currently 20 percent complete with this project, though she should be 25 percent complete with the project work. The project has consumed $495,000 of the project budget to date. Management has asked her the project's Estimate To Complete (ETC) based on the current project performance.
What is the ETC for this project?

$1,312,504
$1,979,952
$1,541,544
$2,474,952

Answer(s): B

Explanation:

The estimate to complete is about knowing how much more money the project will need to complete its objectives.
The estimate to complete (ETC) is the expected cost needed to complete all the remaining work for a scheduled activity, a group of activities,
or the project. ETC helps project managers predict what the final cost of the project will be upon completion. The formula for the ETC is EAC-
AC. The EAC is BAC/CPI. Here it is,
CPI = EV/AC
= (0.20*2,816,000)/495,000
= 563200/495,000
= 1.1378
EAC = BAC/ CPI
= 2,816,000/1.1378
= 2,474,952 (Approx)
ETC = EAC - AC
= 2,474,952 - 495,000
= 1,979,952
Answer options C and A are incorrect. These are not the valid answers for this question.
Answer option D is incorrect. This is the estimate at completion based on the current project performance.

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QUESTION: 159

Harry works as a project manager for BlueWell Inc. A risk that has been identified and analyzed in the project planning processes is now coming into fruition. Who among the following is responsible for implementing the risk responses or contingency plan?

Risk owner
Harry
Project sponsor
Subject matter expert

Answer(s): A

Explanation:

The risk owner is the individual on the project team that is closest to the risk event. The risk owner can be an individual or an organization
responsible for implementing risk responses or contingency plan. The risk owner should be empowered with the ability to respond to the risk
as it was planned.

Answer option B is incorrect. Harry is the project manager and likely would not be the risk owner as

well.

Answer option C is incorrect. The project sponsor authorizes the project but does not participate in execution of the project.

Answer option D is incorrect. While a subject matter expert may be the risk owner on some occasions, he would not be the risk owner on
every occasion.

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QUESTION: 160

Donna is the project manager of the QSD Project and she believes Risk Event D in the following figure is likely to happen.

If this event does happen, how much will Donna have left in the risk contingency reserve if none of the other risk events have happened?

$35,000
$41,700
$6,700
$14,000

Answer(s): C

Explanation:

To answer this question, you'll first need to calculate the contingency reserve. Contingency reserves are estimated costs to be used at the
discretion of the project manager to deal with anticipated, but not certain, events. These events are "known unknowns" and are part of the
project scope and cost baselines. The contingency reserve is calculated by multiplying the probability and the impact for the risk event value

for each risk event. The sum of the risk events equals the contingency reserve for the project. The sum of the risk events equals the
contingency reserve for the project. In this question, the value is $41,700. If Risk D happens, it'll cost the project $35,000. The difference of
$35,000 and $41,700 is $6,700.

Answer option A is incorrect. This is the impact of Risk Event D.
Answer option D is incorrect. $14,000 is the risk event value of Risk Event D.
Answer option B is incorrect. $41,700 is the amount of the contingency reserve.

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