Hi ashu1704!

First of all, post things like this as "plain text" in order to get the necessary space to make it readable ;-)

I have copied your questions and put some space in between to make it easier to read and after each question, there is an answer:

1. A prime contractor in a customer project under CPFF contract has run into unexpected technical problems. Fixing them will require a lot of additional work to be done. The company made a decision to book more staff and equipment from their subcontractors in order to adhere to the agreed timeline. The customer agreed to this decision. What will most likely happen?

A) The contractor‘s indirect costs will increase and the customer‘s payment for them will increase, too.
B) The contractor‘s indirect costs will increase, but the customer‘s payment for them will not increase.
C) The contractor‘s indirect costs will not increase, but the customer‘s payment for them will.
D) Both the contractor's indirect costs and the customer‘s payment for them will not increase.

Answer: The correct answer is D. Hence they are talking about indirect costs here in the alternative, not direct cost as they are describing in the question.

2. A company has to make a choice between two projects, because the available resources in money and kind are not sufficient to run both at the same time. Each project would take 9 months and would cost $250,000. The first project is a process optimization which would result in a cost reduction of $120,000 per year. This benefit would be achieved immediately after the end of the project. The second project would be the development of a new product which could produce the following net profits after the end of the project: 1. year: $ 15,000 2. year: $ 125,000 3. year: $ 220,000 Assumed is a discount rate of 5% per year. Looking at the present values of the benefits of these projects in the first 3 years, what is true?

A) Both projects are equally attractive.
B) The first project is more attractive by app. 7%.
C) The second project is more attractive by app. 5%.
D) The first project is more attractive by app. 3%.

Answer: Right answer is A. Use this link for an explanation: http://forums.oreilly.com/topic/1481-more-questions-1/

3. In order to speed up a project, you made a decision to fast-track a phase currently performed with five team members, and another one which was planned to begin in four weeks time with another five team members. Which of the following activities should you do first?

A) Make sure that all exit criteria of the consecutive phase have been met to ensure the flow of communications in a team situation which is more complex by a factor of 2.
B) Make sure that all entry criteria of the previous phase have been met by planning and performing a phase gate meeting to assess technical aptness.
C) Make sure that all exit criteria of the previous phase have been met by planning and performing a phase gate meeting to assess technical performance.
D) Restructure your team and delegate tasks in order to ensure the flow of communications in a team with the number of communication channels increased by a factor of 4.5.

Answer: The correct answer is D: Follow this link for an explanation and calculation using the communication formula: http://forums.oreilly.com/topic/1481-more-questions-1/

4. You want to perform active risk acceptance. What should you do?

A) Create contingency reserves in resources, money and time.
B) Develop a plan to minimize impact in case that an identified risk occurs.
C) Develop a plan to minimize the probability of occurrence for identified risks.
D) Make additional resources available to speed up the project.

Answer: The correct answer is A. Contingency reserves are for the "known unknown" and is normally what you do if a risk occurs where ACTIVE risk acceptance was the strategy. Risk acceptance is normally used when you cannot see a way to either mitigate, transfer or avoidance of the risk. Passive risk acceptance normally means you do nothing else than documenting the risk.

Hope this helped! Good luck with your studies! /Anna