# cost question

Marks: 1
Management directed all project managers to use earned value analysis. They are also asking you for your estimate at completion, a forecast of the most likely total project costs, at each meeting. Estimate at completion is based on:

 a. Risk quantification b. Project performance c. Trend analysis d. Variance analysis

### new question

Marks: 1
A large, civil engineering project is expected to be performed during the rainy season. A further likelihood is that national elections will be conducted around the same time period, resulting in potential disruptions. Management is nervous about the situation and requests that the project sponsor undertake a study of the risks involved, by interviewing various industry experts. The project manager compiles the data presented below. Calculate the expected monetary value of the project.

 Likely Result Value Probability Good profit \$100,000 0.25 Low profit \$60,000 0.50 Loss -\$40,000 0.25
 a. \$200,000 b. \$45,000 c. \$120,000 d. \$65,000

Answer to second question is b)

= (100000 x 0.25) + (60000 x 0.5) - (4000 x 0.25)

### C-- whether project ETC

Q 1

C-- whether project ETC trend is atypical or typical.

option D and B are very close but they are part of /basis of trend.

Q 2

B     45000

### new Q

You will require use of a high pressure punch press for four months. You can rent the press for \$10,000 payable at the end of each month. You may also choose to make a lump sum payment on the day the press is delivered. Using a discount rate of 1% per month, the maximum lump sum payment you should choose to make is:

 a. \$39,000 b. \$39,250 c. \$38,000 d. \$38,500

The answer is B Project Performance
The answe is B 45,000

### how did u caculate

How did u calcuate for the 3rd question, please elaborate

### Why it cant be.....

Pawar, Why the answer for the 1st question be Project Performance?

### P184 6th line - is the

P184 6th line - is the basis of this question, and the answer is option B, project performance.

But at the same way, if I read,  p186 -Trend analysis - it says - trend analysis examines project performance ..... ..... versus EAC and completion date.

Very close options.

Though I replied option C, but I agree here, on option B.

### 3rd question:Using discount

3rd question:

Using discount rate formula PV = FV/(1+r)^n, for each month seperately for amount 10000.

 Month (1+r)^M discounted amount of 10000= 10000/(1+r)^M 1 1.01000 9901 2 1.02010 9803 3 1.03030 9706 4 1.04060 9610 total 39020

in starting of 1st month if he pays = 9901+9803+9706+9610 =39020, (close to option B)

how it will become 10000 per month in the end of each month , see here:

9901 @1% interest in the end of 1st month = 9901 *(1.01)^1 = 10000

9803 @1% interest in the end of 2nd month = 9803 *(1.01)^2 = 10000

9706 @ 1% interest in the end of 3rd month = 9706 *(1.01)^3 = 10000

9610 @ 1% interest in the end of 4th month = 9610 *(1.01)^4 = 10000

it could not be simply solved IN ONE GO by formula PV = FV/(1+r)^n = here answer will be 40000/(1+.01)^4 = 38439, because you are not paying 40000 in the end of 4 months.

### Hi Pawar

Hi Pawar, I go down when I see calculations, please make my life easy by saying that such questions might not be asked in the real exam...

And for Project Selection what type of numerical questions can be expected?

### NPV/PV  formula based

NPV/PV  formula based question may be asked.

but those will be shorter and close to the principles.

many questions in the mock tests/ question banks on NPV/IRR/PAYBACK are made delibrately vague or based on the knowledge of authors only.

But in real exam such nonqualified questions are not asked.

Above question may be asked for 2 month period. just to know the concept. but chances is very low.

mostly - network based and evm based question are asked.

in above q for explanation point of view, i elaborated it so lengthy otherwise 1st table is sufficient. and it will if be for 2 month, it will not be a lengthy .

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