Level up your Project Management and Contract Administration exam readiness with Set 2 of our MCQ practice series. Perfect your understanding, tackle advanced scenarios, and ace the test confidently. Sharpen your skills with thoughtfully curated questions. Your path to excellence starts here – begin practicing now!
Q41. Select the most appropriate option Ans: A) Enables companies to define the contract terms and transactions that need to be monitored and set tolerance levels
How establishing a contract compliance system provides firms flexibility
A) Enables companies to define the contract terms and transactions that need to be monitored and set tolerance levels
B) More resources
C) More profits
D) Flexible timings
Answer
Q42. Select the most appropriate option Ans: D) A-E.
Refer to the table that follows. Activity Immediate follower Estimated time A6 E B6 F C5 D,G D8 F E4 end F5 end G10 end The critical path is:
A) B-F.
B) C-D-F.
C) C-G.
D) A-E.
Answer
Q43. Select the most appropriate option Ans: D) Resource availability can be reliably foreseen
You have been assigned to a new project and have finished the scope statement. You and your team are now going to create a Work Breakdown Structure. You are spending a lot of time discussing how to create a completely decomposed Work Breakdown Structure. Which of the following is not relevant to this discussion?
A) Status/completion is measurable
B) Time/cost is easily estimated
C) Start/end events are clearly defined
D) Resource availability can be reliably foreseen
Answer
Q44. Select the most appropriate option Ans: B) Reward power
A project manager is meeting with a team member and says, “I know you want to become involved in meetings with the customer. Because of your performance on the project so far, I have rearranged things so you can become involved with the customer.” This is an example of
A) Team alignment
B) Reward power
C) Team building
D) Constraints
Answer
Q45. Select the most appropriate option Ans: A) Work Breakdown Structure
Your company has just received approval to purchase a company that offers complementary services to your company. As PM on the acquisition, you develop deliverable-oriented grouping of project elements that organizes and defines the total scope of the project. This output is called
A) Work Breakdown Structure
B) Scope Management Plan
C) Organizational Breakdown Structure
D) Scope Definition
Answer
Q46. What is the purpose of preparing an econometric model for a project on a PC? Ans: B) To evaluate project feasibility
A) To calculate working capital
B) To evaluate project feasibility
C) To determine capital cost
D) To design a new process
Answer
Q47. Which of the following costs is NOT included in operating costs? Ans: A) Capital Cost
A) Capital Cost
B) Working Capital
C) Operating Cost
D) Revenue
Answer
Q48. Which term refers to the one-time setup cost of a project or plant? Ans: C) Capital Cost
A) Working Capital
B) Operating Cost
C) Capital Cost
D) Revenue
Answer
Q49. What is the primary purpose of evaluating economic feasibility using an econometric model? Ans: C) Assessing project feasibility
A) Determining operating costs
B) Estimating working capital
C) Assessing project feasibility
D) Calculating revenue
Answer
Q50. What is the term used to describe the cash available for the day-to-day operations of an organization? Ans: B) Working Capital
A) Capital Cost
B) Working Capital
C) Operating Cost
D) Revenue
Answer
Q51. Which of the following costs includes the cost per unit of a product or service? Ans: C) Operating Cost
A) Capital Cost
B) Working Capital
C) Operating Cost
D) Revenue
Answer
Q52. Which financial metric is associated with the income generated from the sale of goods or services? Ans: D) Revenue
A) Capital Cost
B) Working Capital
C) Operating Cost
D) Revenue
Answer
Q53. What does revenue represent in an income statement? Ans: A) The top item before all charges and expenses
A) The top item before all charges and expenses
B) The cost of goods sold
C) The operating cost of the organization
D) The capital cost of the project
Answer
Q54. Which term refers to the annual cost incurred on a continuous process? Ans: C) Operating Cost
A) Capital Cost
B) Working Capital
C) Operating Cost
D) Revenue
Answer
Q55. Which of the following is NOT included in operating costs? Ans: D) Revenue from sales
A) Capital outlays
B) Design and implementation costs
C) Annual process cost
D) Revenue from sales
Answer
Q56. What is the primary income source associated with the main operations of an organization? Ans: D) Revenue
A) Capital Cost
B) Working Capital
C) Operating Cost
D) Revenue
Answer
Q57. What is the role of an econometric model in evaluating project feasibility? Ans: D) Assessing project viability
A) Calculating working capital
B) Determining capital cost
C) Preparing financial statements
D) Assessing project viability
Answer
Q58. Which term is used to describe the setup cost of a project that is incurred only once? Ans: C) Capital Cost
A) Working Capital
B) Operating Cost
C) Capital Cost
D) Revenue
Answer
Q59. What is the primary purpose of revenue in an income statement? Ans: D) Generating profit after expenses
A) Covering capital costs
B) Funding working capital
C) Covering operating costs
D) Generating profit after expenses
Answer
Q60. What does the term “Fixed Capital” refer to? Ans: C) Capital employed in assets for repeated use over a long period
A) Capital employed in assets for short-term use
B) Capital invested in risky projects
C) Capital employed in assets for repeated use over a long period
D) Capital used for daily operational expenses
Answer
Q61. What is the definition of “Risk”? Ans: B) The exposure to a company from taking on a task
A) Positive outcomes of a project
B) The exposure to a company from taking on a task
C) Certain and predictable occurrences
D) The result of preemptive actions
Answer
Q62. What is “Project Risk”? Ans: C) The potential for loss or embarrassment due to task completion
A) The risk associated with external events
B) A probability of positive outcomes for a project
C) The potential for loss or embarrassment due to task completion
D) The result of qualitative assumptions in a project
Answer
Q63. What does “Sensitivity Analysis” involve? Ans: B) Changing key assumptions systematically to analyze their effect
A) Changing qualitative assumptions to assess outcomes
B) Changing key assumptions systematically to analyze their effect
C) Predicting only positive outcomes of a project
D) Analyzing internal vulnerabilities only
Answer
Q64. Which type of capital is used in assets that have repeated use over an extended period? Ans: A) Fixed Capital
A) Fixed Capital
B) Risk Capital
C) Working Capital
D) Variable Capital
Answer
Q65. What is the primary purpose of sensitivity analysis? Ans: C) Predicting alternative project outcomes
A) Identifying internal vulnerabilities
B) Assessing qualitative assumptions
C) Predicting alternative project outcomes
D) Evaluating short-term risks
Answer
Q66. Which term describes the potential negative impact that can arise from taking on a specific task? Ans: B) Risk
A) Fixed Capital
B) Risk
C) Sensitivity
D) Opportunity
Answer
Q67. What is the primary goal of contingency analysis? Ans: D) Painting different scenarios
A) Predicting alternative outcomes
B) Identifying internal vulnerabilities
C) Assessing qualitative assumptions
D) Painting different scenarios
Answer
Q68. What does “Fixed Investment” refer to? Ans: D) Capital employed in assets for repeated use over a long period
A) Investments that are easily liquidated
B) Investments in variable assets
C) Capital employed in assets for short-term use
D) Capital employed in assets for repeated use over a long period
Answer
Q69. What is the main difference between sensitivity analysis and contingency analysis? Ans: B) Contingency analysis uses systematic changes in key assumptions
A) Sensitivity analysis focuses on qualitative assumptions
B) Contingency analysis uses systematic changes in key assumptions
C) Sensitivity analysis predicts alternative outcomes
D) Contingency analysis involves risk evaluation only
Answer
Q70. Which term is used to describe the exposure that arises from undertaking a specific task? Ans: C) Project Risk
A) Fixed Capital
B) Sensitivity
C) Project Risk
D) Fixed Investment
Answer
Q71. What is the purpose of sensitivity analysis? Ans: A) Identifying critical factors in a project
A) Identifying critical factors in a project
B) Analyzing internal vulnerabilities
C) Predicting only positive outcomes
D) Assessing qualitative assumptions
Answer
Q72. What is the primary goal of contingency in project cost estimates? Ans: B) Providing scientific basis for estimates
A) Eliminating all risks
B) Providing scientific basis for estimates
C) Ensuring zero loss or embarrassment
D) Predicting project outcomes
Answer
Q73. What is another term for “Sensitivity Analysis”? Ans: C) What-if analysis
A) Risk assessment
B) Contingency analysis
C) What-if analysis
D) Fixed analysis
Answer
Q74. Which type of analysis employs systematic changes in key assumptions to assess outcomes? Ans: A) Sensitivity Analysis
A) Sensitivity Analysis
B) Risk Assessment
C) Contingency Analysis
D) Fixed Capital Analysis
Answer
Q75. What is the primary purpose of the actions to be taken during the initiation of a project? Ans: B) Establishing communication channels
A) Managing project risks
B) Establishing communication channels
C) Finalizing project budget
D) Identifying project milestones
Answer
Q76. Which activity involves estimating manpower deployment to ensure project completion within the agreed schedule? Ans: C) Drawing up project master schedule
A) Procurement planning
B) Communication establishment
C) Drawing up project master schedule
D) Critical path identification
Answer
Q77. What is the key focus of the steps outlined for project initiation? Ans: C) Establishing communication channels
A) Monitoring project progress
B) Managing project risks
C) Establishing communication channels
D) Budget allocation
Answer
Q78. What is the purpose of a project plan? Ans: C) To document parameters impacting the project
A) To manage procurement activities
B) To create communication channels
C) To document parameters impacting the project
D) To determine critical path activities
Answer
Q79. What does the term “Communication Channel” refer to? Ans: C) A medium for transmitting messages to the audience
A) The project budget allocation
B) The project timeline
C) A medium for transmitting messages to the audience
D) The procurement process
Answer
Q80. What does the term “Procurement” involve? Ans: D) Obtaining goods and services
A) Managing project risks
B) Determining project milestones
C) Establishing communication channels
D) Obtaining goods and services
Answer
