Capm-Cost

Front 1

What are the four types of costs?

Back 1

Direct, indirect, fixed and variable

Front 2

What is "direct cost"?

Back 2

Costs directly attributable to the project and spent only on project work

Front 3

What is "indirect cost"?

Back 3

Costs not directly attributable to the project but often allocated to the project (like security for a building where the work will take place).

Front 4

What is "fixed cost"?

Back 4

Costs that are conssiten throughout the project lifecycle regardless of project activity (like the lease on office space).

Front 5

What is "variable cost"?

Back 5

Costs that fluctuate with project activities (like the cost of tile relative to the sq. ft. of the project).

Front 6

What are some case=base project select techniques?

Back 6

Return on investment (ROI), internal rate of return (IRR), net present value (NPV), and Benefit cost ratio (BCR), opportunity cost, and the payback period

Front 7

What is ROI?

Back 7

Return on investment; the largest number or percentage to elect

Front 8

What is IRR?

Back 8

Internal rate of return; Largest percentage to elect

Front 9

What is NPV?

Back 9

Net present value; elect for the largest number with years factored in (accounts for income and cost over time)

Front 10

What is BCR?

Back 10

Benefit cost ratio; largest ratio of cost to benefit to elect an option (divide revenue by cost to get the ratio)

Front 11

What is "opportunity cost"?

Back 11

The value of opportunity not selected

Front 12

What is "payback period"?

Back 12

The shortest duration it takes for the selection to pay you back for the cost

Front 13

What is "future value"?

Back 13

Future value is the value of something such as cash or an investment at a specific point in the future; FV = PV x (1+r)^n [R=interest rate;n=number of periods]

Front 14

What is "present value"?

Back 14

PV is the value of something today needed to create a certain amount of investment in the future. PV = FV / (1+r)^n

Front 15

What is "sunk cost"?

Back 15

The cost that has already been spent on a project; you are not supposed to consider this when making future project decisions. Only do the math on factors that project.

Front 16

What is "depreciation"?

Back 16

Depreciation is the process of devaluing a capital asset in the tax system.

Front 17

What is "standard depreciation"?

Back 17

Standard depreciation is the Start Value (purchase price) divided by the depreciation timeframe (number of years). If the scrap value is greater than zero, then the Start Value - scrap value / depreciation timeframe.

Front 18

What is "accelerated depreciation"?

Back 18

Accelerated depreciation is a more complicated and quicker form of depreciation for which there are two kinds: (1) Sum of the year's digits and (2) Double declining balance (DDB)

Front 19

What is "life cycle cost"?

Back 19

Life cycle costs aka Total Cost of Ownership (TCO) is the process for examining all costs associated with a project and its product once it goes into production.

Front 20

What is "fixed formula progress reporting"?

Back 20

Fixed formula progress reporting, aka Earned Value Rules, is a technique that creates a consistent status report for project activities (like a set of ballpark percentages: 25%/75% or 50%/50% ) typically used on shorter reporting periods

Front 21

What are "weighted milestones"?

Back 21

Weighted milestones are typically used for activities that are longer than two reporting periods (work is divided into milestone groups with assigned percentages)

Front 22

Process - Plan cost management

Back 22

in the PLANNING process group; formal or relax guidance for selecting methods used to establish and modify cost estimates, budget, performance baseline and control thresholds

Front 23

Process - Plan cost management: inputs

Back 23

Project management plan; project charter

Front 24

Process - Plan cost management: tools and techniques

Back 24

Expert judgment; analytical techniques

Front 25

Process - Plan cost management: outputs

Back 25

Cost management plan

Front 26

What does the cost management plan help do?

Back 26

establish the cost of activities and work packages; establish cost accounts and how to use the chart of accounts with the WBS and schedule; establish policies associated with updating the budget and distribution of the budget; update actual costs and adjust the cost baseline; deal with cost changes

Front 27

What does the ost management plan help to establish?

Back 27

Level of accuracy; Units of measure; Organizational procedure links including control accounts; control thresholds; reporting cost performance

Front 28

Process - Estimate costs

Back 28

in the PLANNING process group; Accuracy of cost estimates directly impact the likelihood of completing on budget

Front 29

What are the four cost estimating methods?

Back 29

Analogous; Parametric, bottom-up; Computerized

Front 30

What is the analogous cost estimating method?

Back 30

comparing to a previous project

Front 31

What is the parametric cost estimating method?

Back 31

Parameters around which the estimate is built

Front 32

What is the bottom-up cost estimating method?

Back 32

individualized items are estimated and then summed for a total cost

Front 33

What is the computerized cost estimating method?

Back 33

Modeling variables to compute likelihood of predictable costs

Front 34

Process - Estimate costs: inputs

Back 34

cost management plan; human resource management plan; scope baseline; project schedule; risk register

Front 35

Process - Estimate costs: tools and techniques

Back 35

Expoert judgment; analogous estimating; parametric estimating; bottom-up estimating; three-point (best, worst and most likely cases) estimating; reserve analysis (planning for known unknowns); cost of quality (factor in creating project cost estimates for both comformance and non-comformance); vendor bid analysis; project management software

Front 36

Process - Estimate costs: outputs

Back 36

Activity cost estimates (probable cost associated with the use of resources); basis of estimates (detailed logic or rules that govern the estimates).

Front 37

What is cost range?

Back 37

The tollerable range of costs ( $ +/- ) based on what you know. Early on with less known, cost range can be between -25/+75% and as time progresses or as you know more, costs might tighten to -5/+10%

Front 38

Process - Determine budget

Back 38

in the PLANNING process group; rolling up the cost estimates for the activities and work packages to creat a total project budget amount in the time-based cost baseline.

Front 39

Process - Determine budget: inputs

Back 39

cost management plan; scope baseline; activity cost estimates; basis of estimates; project schedule; resource calendars (dates a resource is schedule or available); risk register; agreements

Front 40

Process - Determine budget: tools and techniques

Back 40

cost aggregation; reserve analysis (planning for known unknowns and unknown unknowns adding extra time and money); expert judgment; historical relationships; funding limit reconciliation (balancing actual spending with preset funding limits often using work rescheduling).

Front 41

Process - Determine budget: outputs

Back 41

cost baseline (control account aggregates = approved budget not including any management reserves); project funding requirements (total and periodic [predicted schedule for spending] )

Front 42

What is cost aggregation?

Back 42

Three step process: (1) activity cost estimates and summed into work packages; (2) work package estimates are rolled into control accounts; and (3) control accounts are rolled into a project-level aggregate

Front 43

What is a chart of accounts?

Back 43

a list of accounts used by the accounting and/or project management system to establish and track budgets associated with work packages in the baseline

Front 44

What is the code of accounts?

Back 44

a numbering system that is applied in project management to identify individual pieces of work in the WBS

Front 45

Process - Control costs

Back 45

in the MONITORING AND CONTROLLING process group; how to control any budget changes

Front 46

Process - Control costs: inputs

Back 46

Project management plan; project funding requirements; work performance data

Front 47

Process - Control costs: tools and techniques

Back 47

earned value management; Forecasting (estimates of future project performance); To-Complete performance Index; Performance reviews (cost performance estimates to actuals); project management software; reserve analysis

Front 48

Process - Control costs: outputs

Back 48

Work performance information (reporting cost performance index [CPI], schedule performance index [SPI], cost variance [CV], and schedule variance [SV]); cost forecasting (like estiamte at completion [EAC]); change requests (requested but not approved); project management plan updates

Front 49

What is earned value management?

Back 49

Used to measure project scope, schedule and cost effectiveness in terms of execution, tracking the amount of work completed with its costs to the amount of work yet-to-be completed and it's costs at a particular point in time

Front 50

What is planned value?

Back 50

The value of the work estimated at a particular point in time

Front 51

What is To-Complete Performance Index?

Back 51

TCPI: determines the needed efficiency of spending to complete the work on-budget

Front 52

What is schedule analysis?

Back 52

Comparing the amount of work completed to the amount of work that should have been done at a point in time.

Front 53

What is the schedule performance index formula?

Back 53

SPI = EV / PV (estimated divided by planned value) it is an efficiency indicator; 1 = on track; >1 = ahead; <1 = behind

Front 54

What is the schedule variance formula?

Back 54

SV = EV - PV (estimated minus planned value) it is an efficiency indicator; 0 = on track; >0 = ahead; <0 = behind

Front 55

What is the cost performance index formula?

Back 55

CPI = EV / AC (estimated divided by actual cost) it is an efficiency indicator; 1 = on track; >1 = under budget; <1 = over budget

Front 56

What is the cost variance formula?

Back 56

CV = EV - AC (estimated minus actual cost) it is an efficiency indicator; 0 = on track; >0 = under budget; <0 = under budget

Front 57

What are the different cost forecast formulas?

Back 57

Estimate at completion (EAC); Estimate to complete (ETC); Variance at Completion (VAC); To-Complete Performance Index (TCPI)

Front 58

What is the estimate at completion formula?

Back 58

EAC = BAC / CPI (budget at completion divided by cost performance index) if CPI is greater than 1 you will end under budget; otherwise you will end overbudget

Front 59

What is the estimate to complete formula?

Back 59

ETC = EAC - AC (estimate at completion minus actual cost)

Front 60

What is the variance at completion formula?

Back 60

VAC = BAC - EAC (difference between the budget at completion and the estimate at completion)

Front 61

What is the to-complete performance index?

Back 61

TCPI = (BAC - EV) / (BAC - AC); an efficiency indicator denoting the efficiency needed from the remaining resources to meet the project cost goals and finish on-budget

Front 62

What is actual cost?

Back 62

All actual costs related to the project

Front 63

How do you calculate earned value?

Back 63

EV = PV x (activity % complete)

Front 64

How do you calculate Budget At Completion?

Back 64

Total of all planned values for all activities

Front 65

How do you calculate planned value?

Back 65

add up the planned value for each activity until a point in time

Front 66

How do you calculate actual cost?

Back 66

Any costs actually realized so far in the project.