Question 1

Estimates based on the assumption that historical data can be used as a frame of reference for current estimates are:
A)Comparative estimates.
B)Ballpark estimates.
C)Definitive estimates.
D)Feasibility estimates.

Accepted Answer

Comparative estimates are based on historical data and are used to compare similar projects or tasks to determine an estimated cost or time frame. This assumes that the historical data can be used as a guide for current estimates, making it the best choice for this scenario. Ballpark estimates are rough estimates that don't take into account historical data or specific details, while definitive estimates are very precise and require extensive analysis. Feasibility estimates are used to assess the possibility of a project being successful, and not necessarily the cost or time frame.

Question 2

The order of magnitude cost estimate is used when:
A)Ballpark estimates are not considered accurate enough.
B)Historical data are readily available.
C)Information or time is scarce.
D)Parametric estimation has already been performed.

Accepted Answer

The order of magnitude cost estimate is used when information or time is scarce. It is a rough estimate that provides a general idea of the potential cost of a project or product. The estimates are typically given in a range, and the actual cost will likely fall somewhere within that range. This type of estimation is often used early in the project planning process when a more accurate estimate is not yet possible due to the limited information available.

Question 3

When asked to provide an estimate of an irrigation system,Pete looked from one end of the field to the other,licked a finger and held it in the air,squinted into the sun and said $25,000,give or take 30%.The technique employed for cost estimation is:
A)Parametric.
B)Comparative.
C)Definitive.
D)Ballpark.

Accepted Answer

Pete's technique of licking a finger, holding it in the air, and giving a ballpark estimate is not based on detailed analysis or data. It is a rough estimate that falls under the category of a "ballpark" estimate. Therefore, the correct answer is option D.

Question 4

What learning rate is being demonstrated if the first unit takes 25 hours and the third unit takes 24 hours to complete?
A)Greater than or equal to 97 percent
B)Less than 97 percent but greater than or equal to 95 percent
C)Less than 95 percent but greater than or equal to 93 percent
D)Less than 93 percent

Accepted Answer

The learning rate is greater than or equal to 97 percent because the time to complete units is decreasing very slowly, indicating a high learning rate.

Question 5

It took 44 hours of analysis to complete the first phase,but the second phase was done in 42 hours.If this learning rate continues,then the 8th analysis should take a mere:
A)36 hours and 26 minutes,give or take.
B)37 hours and 36 minutes,give or take.
C)38 hours and 16 minutes,give or take.
D)39 hours and 6 minutes,give or take.

Accepted Answer

We are dealing with a linear progression, so we can use the formula:

y = mx + b

where y is the time, x is the phase number, m is the rate of change, and b is the initial time.

Using the first two data points, we can find m:

44 = m(1) + b 
42 = m(2) + b

Subtracting the second equation from the first, we get:

2 = m

Now we can use b to find the time for any phase:

44 = 2(1) + b 
b = 42

So the formula for the time it takes to complete phase x is:

y = 2x + 42

To find the time for the 8th phase, plug in x = 8:

y = 2(8) + 42 
y = 58

So the 8th analysis should take about 38 hours and 16 minutes, give or take.

Question 6

Explain the difference between normal and expedited costs,fixed and variable costs,and recurring or nonrecurring costs.Create a 2 × 2 × 2 matrix and provide one example each (8 total examples)of each combination of these costs.

Accepted Answer

The answer of Explain the difference between normal and expedited...

Question 7

A project manager is estimating costs on her video game development project.She utilizes total costs from a similar project that was completed last year to estimate the costs on her current project.This is an example of:
A)Bottom-up estimation
B)Rough order magnitude estimation
C)Analogous estimation
D)Parametric estimation

Accepted Answer

The answer of A project manager is estimating costs on...

Question 8

Rank the four different types of cost estimates from most to least accurate and explain what the inputs are to each type.

Accepted Answer

The answer of Rank the four different types of cost...

Question 9

Effective comparative estimates rely most heavily on:
A)An accurate inflation factor.
B)The correct number of years elapsed between the old project and the current one.
C)True comparability between the current project and previous project work.
D)The correct number of employees on the new project compared with the previous one.

Accepted Answer

Effective comparative estimates rely most heavily on true comparability between the current project and previous project work. The accuracy of the inflation factor and the number of years elapsed between the old and current project are important, but they are not the most important factors. The number of employees on the new project may also be a factor, but this is not mentioned in the question as being crucial to effective comparative estimates.

Question 10

An order of magnitude estimate is usually more accurate than a ballpark estimate.

Accepted Answer

An order of magnitude estimate and a ballpark estimate are both rough estimates, but neither is consistently more accurate than the other; the terms are often used interchangeably to describe an approximation.

Question 11

Which of these estimates should be the most accurate?
A)Parametric
B)Definitive
C)Comparative
D)Order of magnitude

Accepted Answer

Definitive estimates are the most accurate as they are based on detailed and comprehensive information and analysis of the project scope and requirements. They rely on specific, measurable data, such as material and labor costs, and therefore offer the most accurate estimate of the total project cost.

Question 12

If a project manager is using a similar,past project as a basis to estimate costs for a new project,he or she is utilizing analogous estimating.

Accepted Answer

This statement is correct. Analogous estimating involves using similar past projects as a basis for estimating costs for a new project. It is a top-down approach in which the project manager makes an educated guess based on previous experience or knowledge.

Question 13

Cost estimates that are based as a guideline on real numbers,or figures derived after the completion of preliminary design work,are:
A)Definitive estimates.
B)Order of magnitude estimates.
C)Parametric estimates.
D)Feasibility estimates.

Accepted Answer

The answer of Cost estimates that are based as a...

Question 14

Once most of the design work is complete,at a point when the scope and capabilities of the project are quite well understood,a ________ may be developed.
A)definitive estimate
B)comparative estimate
C)parametric estimate
D)non-parametric estimate

Accepted Answer

A definitive estimate is the most accurate and detailed estimate that takes into account every aspect of the project's scope, design, requirements, and deliverables. It is created at a point when the scope and capabilities of the project are quite well understood, and most of the design work is complete. It accounts for all possible costs, including direct and indirect costs, contingencies, and risk factors, and provides a complete picture of the project's budget and timeline. A comparative estimate compares the cost of the project with similar projects, while a parametric estimate uses statistical data and historical trends to estimate costs. A non-parametric estimate is an estimate that is based on the expert judgment of experienced professionals rather than on any scientific or statistical models. None of these options are the best choice when most of the design work is already complete and the scope is well understood.

Question 15

When their baby was ready to head off to college,the beleaguered parents pulled out the college folder from their file cabinet and added up the cost of putting their first child through college from 1995-2000.The mother whimpered as she factored in the rising cost of tuition,fees,books,and inflation by multiplying the total by 2.5.The father felt a searing pain go through his chest as he saw the total,knowing full well that their cost estimation approach,called:
A)An order of magnitude estimate,was highly accurate.
B)Parametric estimation,was highly accurate.
C)Feasibility estimation,was highly accurate.
D)Definitive estimation,was highly accurate.

Accepted Answer

Parametric estimation involves using statistical relationships between historical data and other variables to estimate costs, which aligns with the parents' approach of factoring in inflation and rising costs.

Question 16

Analogous estimation is a type of ________ estimating method.
A)comparative
B)ballpark
C)definitive
D)feasibility

Accepted Answer

Analogous estimation is a comparative estimating method based on similarities between the current project and a previously completed project. It involves using historical data or information from a similar project to estimate the cost, duration, or effort required for the current project. Ballpark, definitive, and feasibility are not types of estimating methods.

Question 17

The analogous estimation method is a bottom-up estimating approach.

Accepted Answer

The analogous estimation method is a top-down approach, where past project data is used to estimate the cost and duration of a current project, often using expert judgment to make the comparison.

Question 18

An activity with a learning rate of 0.85 takes 25 hours for the first iteration.How long will it take to complete this task for the 15th time?
A)12.55 hours
B)12.85 hours
C)13.15 hours
D)13.25 hours

Accepted Answer

The answer of An activity with a learning rate of...

Question 19

If it takes 40 hours to complete the first unit and the company knows from experience that the learning rate should be 0.80,how fast can they be expected to finish all twelve units?
A)18 hours
B)289 hours
C)264 hours
D)316 hours

Accepted Answer

The learning rate of 0.80 implies an 80% reduction in time taken for each subsequent unit based on the previous one. To calculate the total time for 12 units, we use the formula for the sum of a geometric series: Total Time = T1 * (1 - r^n) / (1 - r), where T1 is the time for the first unit, r is the learning rate, and n is the number of units. Plugging in the values: Total Time = 40 * (1 - 0.80^12) / (1 - 0.80) = 289 hours.

Question 20

A key for developing project cost estimates is to:
A)Cost the project while considering the total package.
B)Cost the project on a work package and task basis.
C)Cost the project on a major module basis.
D)Cost the project and add 33% for contingency.

Accepted Answer

Costing the project on a work package and task basis allows for a more detailed and accurate estimate, as it considers the individual components of the project and their associated costs. This approach also allows for easier tracking and management of costs during the project execution phase.

Quiz 8: Cost Estimation and Budgeting

Estimates based on the assumption that historical data can be used as a frame of reference for current estimates are:

The order of magnitude cost estimate is used when:

When asked to provide an estimate of an irrigation system,Pete looked from one end of the field to the other,licked a finger and held it in the air,squinted into the sun and said $25,000,give or take 30%.The technique employed for cost estimation is:

What learning rate is being demonstrated if the first unit takes 25 hours and the third unit takes 24 hours to complete?

It took 44 hours of analysis to complete the first phase,but the second phase was done in 42 hours.If this learning rate continues,then the 8th analysis should take a mere:

Explain the difference between normal and expedited costs,fixed and variable costs,and recurring or nonrecurring costs.Create a 2 × 2 × 2 matrix and provide one example each (8 total examples)of each combination of these costs.

A project manager is estimating costs on her video game development project.She utilizes total costs from a similar project that was completed last year to estimate the costs on her current project.This is an example of:

Rank the four different types of cost estimates from most to least accurate and explain what the inputs are to each type.

Effective comparative estimates rely most heavily on:

An order of magnitude estimate is usually more accurate than a ballpark estimate.

Which of these estimates should be the most accurate?

If a project manager is using a similar,past project as a basis to estimate costs for a new project,he or she is utilizing analogous estimating.

Cost estimates that are based as a guideline on real numbers,or figures derived after the completion of preliminary design work,are:

Once most of the design work is complete,at a point when the scope and capabilities of the project are quite well understood,a ________ may be developed.

Analogous estimation is a type of ________ estimating method.

The analogous estimation method is a bottom-up estimating approach.

An activity with a learning rate of 0.85 takes 25 hours for the first iteration.How long will it take to complete this task for the 15th time?

If it takes 40 hours to complete the first unit and the company knows from experience that the learning rate should be 0.80,how fast can they be expected to finish all twelve units?

A key for developing project cost estimates is to: