Practice Quiz

PMI PMP Project Management

Category - Cost Management

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Which of the following is NOT true about estimating costs for a project?
  1. The project budget should be managed according to the cost baseline.
  2. Estimating should be done by those individuals performing the work.
  3. Corrective action should be taken when problems with cost happen.
  4. High-level estimates are perfectly acceptable.
  5. Sunk costs should not be included when deciding whether to continue with a project.
Explanation
Answer: d - High-level estimates are not effective; conversely, estimates done at the work package- specific level are the most effective.

As noted above, projects should be managed to their projected baselines, be performed by those performing the work and involve corrective action, when needed.

Key Take Away: One study found that 9 out of 10 projects came in over-budget. What does that mean to you? It means this will most likely happen to your project unless you take a hold of your cost management reins early on.
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