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30 Cards in this Set
 Front
 Back
TRUE/FALSE:
Many information technology projects, that have cost overruns, involve new technology or business processes. 
True. 

TRUE/FALSE:
Cash flow analysis is a method for determining the estimated annual costs and benefits for a project and the resulting annual cash flow. 
True. 

TRUE/FALSE:
Internal rate of return (IRR) is the discount rate that makes net present value greater than zero. 
False. 

TRUE/FALSE:
A rough order of magnitude (ROM) estimate provides a rough idea of how long a project will run. 
False. 

TRUE/FALSE:
Analogous estimates are also called bottomup estimating. 
False. 

TRUE/FALSE:
Bottom up estimating involves estimating individual work items and summing them to get a project total. 
True. 

TRUE/FALSE:
Constructive Cost Model (COCOMO) is used for estimating software development costs based on parameters. 
True. 

TRUE/FALSE:
Earned Value Management (EVM) is a project performance measurement technique that integrates scope, time, and cost data. 
True. 

TRUE/FALSE:
A project baseline is the original project plan plus any changes waiting for approvals. 
False. 

Project cost management includes the following three functions: (3). 


What is a sunk cost? 
The cost of a failed project. 

Life cycle costing is a method of ________________________. 
Including all of the costs associated with the project over its entire life. 

A parametric cost estimate is a __________ estimating technique and a __________ estimating technique. 
top down
statistical 

"Earned value" can best be defined as _____________________________________________________________________. 
The actual cost of work performed (ACWP) minus the budgeted cost of work performed (BCWP). 

The cost performance index (CPI) is ____________________. 
Earned value divided by actual cost. 

The project is considered on schedule if the scheduled performance index (SPI) is _______. 
One or 100 percent. 

In a software project, the planned value (PV) was 80,000, the earned value (EV) was 75,000, and the actual cost (AC) was 71,00, what is the schedule variance (SV)? 
5,000. 

In a software project, the planned value (PV) was 80,000, the earned value (EV) was 75,000 and the actual cost (AC) was 71,000, what is the cost performance index? 
1.056 

In a software project, the planned value (PV) was 80,000, the earned value (EV) was 75,000 and the actual cost (AC) was 71,000, what is the cost variance (CV)? 
+4,000. 

Cash flow _________ is a method for determining the estimated annual costs and benefits for a project. 
analysis. 

___________________ management plan is a document that describes how cost variances will be managed on the project. 
Cost. 

A rough order of magnitude _____________ is a cost estimate prepared very early in the life of a project to provide a rough idea of what a project will cost. 
estimate. 

Cost performance ______________ is the ratio of earned value to actual cost; can be used to estimate the projected cost to complete the project. 
Index. 

______________ systems are older information technology systems that usually ran on an old mainframe computer. 
Legacy. 

____________________ is equal to revenues minus expenses. 
Profit. 

Profit ________________________ is the ratio between revenues and profits. 
margin. 

________________________ modeling is a costestimating technique that uses project characteristics in a mathematical model to estimate project costs. 
Parametric. 

According to the 1995 CHAOS study, what was the average cost overrun on IT projects? What was it in the 2001 study? 
169 percent in the 1995 study; 45 percent in the 2001 study. 

Suppose you sell 10 widgets per day on average, and the average cost per widget is $10. If you sold 11 widgets one day, what would the affect on profits be? 
There is not enough information to answer this question. You are given costs and asked to estimate profits. You do not know what the average profit is per widget. You might lose money by selling more widgets. 

What is another name for earned value? 
BCWP or budgeted cost of work performed 