Page 326 - Project+

4. C. A contingency fund is an amount allocated to cover the cost of possible adverse

events, and the project manager generally has the ability to use this fund. The
project manager does not usually have the authority to spend money from the
management reserve. The chart of accounts is a description of the accounts listed in
the accounting ledger, and the cost baseline is the total expected cost for the
project.

5. A. Management reserves are not part of the project cost budget or cost baseline.

6. C. Bottom-up estimates start at the work package level of the WBS. Each work
package on the WBS for the first phase of the project is summed to come up with an
overall estimate for this phase. Historical data would be useful if you were using the
analogous estimating technique. The chart of accounts doesn’t help at all with this
exercise, and the scope statement will give you an understanding of what’s detailed
on the WBS, but it won’t help with estimating.

7. B. Bottom-up estimates are the most accurate estimates, and analogous estimates

are the least accurate. Estimates based on expert judgment are analogous
estimates. Parametric estimates are only as accurate as the data you’re using for the
parametric model.

8. C. The cost baseline is approved by the project sponsor, not the project manager.

9. D, G, H. Three-point estimates are the average of the most likely, optimistic, and
pessimistic estimates.

10. C. The burn rate is typically calculated using the cost performance index (CPI). This
tells you the efficiency or benefits of the money spent at any point in the project.

11. B. The rate that is established for a given resource times the work effort (usually

expressed in hours) will yield the total estimate for the task.

12. D. Transfer is a risk strategy that transfers the consequences of the risk to another
party.

13. A. SWOT stands for strengths, weaknesses, opportunities, and threats. Examining
the project from each of these perspectives helps you identify risks. The other
options are cost performance measurements.

14. A, B, C. During the early stages of risk planning, a risk register typically has a risk

identification number, a description of the risk, the probability and impact of the
risk event, risk score, and risk owner. Your risk register could also contain the risk
trigger and other pertinent information about the risk.

15. D. The risk strategy of accepting a risk involves dealing with the consequences
when they occur. You don’t prepare a risk response plan for risks you plan to
accept.

16. B. The difference between what you planned to spend and what was actually spent

is known as a budget variance.

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