Earned Value Management (EVM) MCQs – Software Project  Management

1. What is the primary goal of budgeting in project management?
A) To allocate financial resources to various project activities
B) To define the project scope
C) To establish project milestones
D) To manage project risks
Answer: A

2. Which document outlines the approved budget and how it will be allocated across project activities?
A) Project Charter
B) Cost Management Plan
C) Work Breakdown Structure (WBS)
D) Risk Register
Answer: B

3. What is a “cost baseline” in project management?
A) The approved version of the project budget
B) A document detailing potential risks
C) The list of project deliverables
D) The schedule of project activities
Answer: A

4. What does the term “earned value” (EV) refer to in project cost management?
A) The value of work performed compared to the planned value
B) The total cost of completed work
C) The estimated cost to complete the project
D) The actual cost incurred for project activities
Answer: A

5. Which of the following is a technique used for monitoring and controlling project costs?
A) Earned Value Management (EVM)
B) SWOT Analysis
C) Gantt Chart
D) Pareto Analysis
Answer: A

6. What does the “Cost Performance Index” (CPI) measure?
A) Cost efficiency and effectiveness of the project
B) The time required to complete project tasks
C) The overall project risk
D) The progress of project deliverables
Answer: A

7. What is the formula to calculate the Cost Performance Index (CPI)?
A) CPI = EV / AC
B) CPI = EV / PV
C) CPI = AC / EV
D) CPI = PV / AC
Answer: A

8. What does the “Schedule Performance Index” (SPI) measure?
A) Schedule efficiency and effectiveness of the project
B) Cost incurred to complete the project
C) The number of project risks identified
D) The actual time spent on project activities
Answer: A

9. What is the formula to calculate the Schedule Performance Index (SPI)?
A) SPI = EV / PV
B) SPI = PV / EV
C) SPI = AC / EV
D) SPI = EV / AC
Answer: A

10. What does “Budget at Completion” (BAC) represent in project management?
A) The total budget allocated for the entire project
B) The amount of money spent so far
C) The amount of money remaining to be spent
D) The cost of individual project tasks
Answer: A

11. What is the “Cost Variance” (CV) in project management?
A) The difference between the earned value and actual cost
B) The difference between the planned value and earned value
C) The total cost of project completion
D) The estimated cost to complete the project
Answer: A

12. What is the formula to calculate Cost Variance (CV)?
A) CV = EV – AC
B) CV = AC – EV
C) CV = PV – EV
D) CV = EV – PV
Answer: A

13. What does the “Schedule Variance” (SV) indicate?
A) The difference between the earned value and planned value
B) The difference between the actual cost and earned value
C) The total cost incurred so far
D) The cost of completed project work
Answer: A

14. What is the formula to calculate Schedule Variance (SV)?
A) SV = EV – PV
B) SV = PV – EV
C) SV = AC – EV
D) SV = EV – AC
Answer: A

15. What is the purpose of a “Cost Management Plan”?
A) To define how project costs will be estimated, budgeted, and controlled
B) To outline project risks and mitigation strategies
C) To describe the project’s scope and deliverables
D) To detail the project schedule and milestones
Answer: A

16. What does “Estimate at Completion” (EAC) refer to in project cost management?
A) The forecasted total cost of the project at completion
B) The actual cost incurred to date
C) The planned cost of the project
D) The cost of work completed so far
Answer: A

17. Which formula is used to calculate the Estimate at Completion (EAC) when the CPI is expected to remain constant?
A) EAC = BAC / CPI
B) EAC = BAC + (AC – EV)
C) EAC = EV + (BAC – EV) / SPI
D) EAC = BAC – CV
Answer: A

18. What is “To-Complete Performance Index” (TCPI)?
A) The performance index that indicates the cost performance required to complete the project within the budget
B) The index that measures the efficiency of project tasks
C) The percentage of the project completed so far
D) The amount of cost variance incurred
Answer: A

19. What is the formula to calculate the To-Complete Performance Index (TCPI)?
A) TCPI = (BAC – EV) / (BAC – AC)
B) TCPI = (EV – AC) / (BAC – EV)
C) TCPI = (AC – EV) / (BAC – AC)
D) TCPI = (EV – AC) / (BAC – EV)
Answer: A

20. Which technique involves forecasting the cost required to complete the remaining work of the project?
A) Estimate at Completion (EAC)
B) Cost Baseline
C) Earned Value Management (EVM)
D) Cost Performance Index (CPI)
Answer: A

21. What does “Actual Cost” (AC) represent in project management?
A) The total cost incurred for the work performed during a given time period
B) The cost planned for a specific project activity
C) The cost forecasted for the entire project
D) The value of work completed at a specific point in time
Answer: A

22. What is “Planned Value” (PV) in project cost management?
A) The budgeted cost for the work scheduled to be performed by a specific time
B) The total cost of work completed
C) The amount of money spent so far
D) The forecasted cost to complete the project
Answer: A

23. What does “Cost Control” involve?
A) Monitoring project performance to keep it within the approved budget
B) Defining project scope and deliverables
C) Identifying project risks and developing mitigation strategies
D) Creating a detailed project schedule
Answer: A

24. Which of the following is a common cost control technique?
A) Variance Analysis
B) Risk Assessment
C) Requirements Gathering
D) Scope Definition
Answer: A

25. What is the purpose of a “Cost Variance Analysis”?
A) To determine the difference between the planned and actual costs
B) To estimate future project costs
C) To assess the schedule performance of the project
D) To allocate project resources effectively
Answer: A

26. What is the primary function of the “Cost Performance Baseline”?
A) To provide a reference for measuring cost performance and variance
B) To detail the project scope and deliverables
C) To forecast future project costs
D) To establish project milestones and deadlines
Answer: A

27. Which tool is commonly used to visually represent project cost performance and control?
A) Cost Performance Graph
B) Gantt Chart
C) PERT Chart
D) Risk Matrix
Answer: A

28. What is the main objective of cost budgeting?
A) To allocate financial resources effectively across project activities
B) To establish project milestones and deliverables
C) To define project risks and mitigation plans
D) To monitor project schedule performance
Answer: A

29. What is the role of “cost forecasting” in project management?
A) To predict future project costs based on current performance and trends
B) To estimate the cost of individual project tasks
C) To define the project scope and deliverables
D) To create a detailed project schedule
Answer: A

30. Which factor can influence project cost overruns?
A) Scope creep
B) Risk management
C) Schedule adherence
D) Project milestones
Answer: A

31. What does the term “budget overruns” refer to?
A) Exceeding the approved project budget
B) Staying within the planned budget
C) Completing the project under budget
D) Allocating additional funds to the project
Answer: A

32. What is the purpose of a “Cost Management Plan” in controlling project costs?
A) To define the processes and methods for planning, estimating, and controlling costs
B) To outline project risks and their mitigation strategies
C) To establish the project scope and deliverables
D) To create a detailed project schedule
Answer: A

33. What does “contingency reserve” refer to in project budgeting?
A) The budget allocated to address unforeseen risks or changes
B) The total cost of completed project work
C) The estimated cost to complete the project
D) The cost of project resources
Answer: A

34. What is the purpose of a “Cost Benefit Analysis”?
A) To compare the benefits of a project against its costs
B) To estimate project costs
C) To identify project risks
D) To define project deliverables
Answer: A

35. Which tool or technique can be used to evaluate project cost trends over time?
A) Earned Value Management
B) Gantt Chart
C) Risk Analysis
D) PERT Chart
Answer: A

36. What does “funding limit reconciliation” involve?
A) Adjusting the project budget to ensure it stays within the funding limits
B) Forecasting project costs
C) Estimating the budget for project activities
D) Identifying cost risks and their mitigation strategies
Answer: A

37. Which is an example of a “fixed cost” in a project?
A) Salaries of project team members
B) Cost of raw materials
C) Utility bills
D) Travel expenses
Answer: A

38. What does “Cost of Quality” refer to in project management?
A) The cost incurred to prevent poor quality and to fix defects
B) The cost of quality audits
C) The cost of managing project resources
D) The cost of project materials
Answer: A

39. What does “earned value analysis” allow a project manager to do?
A) Evaluate cost and schedule performance simultaneously
B) Create a project schedule
C) Track project risks
D) Allocate resources effectively
Answer: A

40. Which cost management process involves monitoring project costs to ensure they are within the approved budget?
A) Control Costs
B) Estimate Costs
C) Define Scope
D) Develop Schedule
Answer: A