Chapter 7

Question 1

Why is project cost management important

Answer 1

projects have an estimated average cost overrun of 27 percent

Question 2

what is project cost management

Answer 2

the process required to ensure that a project team completes a project within an approved budget

Question 3

What are the four processes of project cost managament?

Answer 3

• planning cost management
• estimating costs
• determining the budget
• controlling costs

Question 4

What is life cycle costing

Answer 4

big-picture view of the cost of a project throughout its life cycle. helps you develop an accurate projection of a projects financial costs and benefits.

Question 5

what is a cash analysis

Answer 5

method for determining the estimated annual costs and benefits for a project.

Question 6

what are tangible costs or benefits

Answer 6

easy to messure in dollars

Question 7

what are intangible costs or benefits

Answer 7

difficult to measure in dollars

Question 8

what are typical problems with IT cost estimates

Answer 8

• estimates are done too quickly
• people lack estimating experience
• human beings are biased toward underestimation
• management desires accuracy

Question 9

What is planned value

Answer 9

authorized budget assigned to scheduled work

Question 10

What is actual cost

Answer 10

realized cost incurred for the performed

Question 11

What is earned value

Answer 11

measure of work performed expressed in terms of the budget