Project Management Professional (PMP) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the Project Management Professional (PMP) exam. Study with flashcards and multiple choice questions. With over 500 questions. Practice the PMP practice multiple choice questions. Updated for 2023-2025. Get ready for your exam!

Start Multiple Choice Practice Test
Start Flash Cards

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

You are assigned as a project manager for an internal project. During cost planning and budgeting you discovered that there are peak times of costs during the project and other times when costs are fairly low. What could this mean for the project?

  1. The fiscal budget mechanism which is used by the performing organization may not allow for cost peaks in your project, and you may have to level out expenditures over time.

  2. You can silently create budget contingencies during low-cost periods and re-use them later during those periods when you have to cover peak levels in project costs.

  3. You may find another project manager with a project that has a different rhythm of high and low costs. Then, you may be able to move budget during one project’s low cost periods to the other project.

  4. You are a project manager and work with a lifecycle budget for your project. Fiscal budgets are a matter of the functional organization, and you generally do not have to care about them.

The correct answer is: The fiscal budget mechanism which is used by the performing organization may not allow for cost peaks in your project, and you may have to level out expenditures over time.

During cost planning and budgeting, it is important to consider the timing of costs throughout the project. Option A is the correct answer because it acknowledges the possibility that the fiscal budget mechanism used by the organization may not allow for cost peaks in the project. This means that project costs may need to be levelled out over time to fit within the budget constraints. Option B is incorrect because it suggests creating budget contingencies during low-cost periods, which may not be feasible or allowed by the organization's budgeting process. Option C is also incorrect because it suggests shifting budget from one project to another based on their cost patterns, which may not be possible or appropriate. Option D is incorrect because as a project manager, you are responsible for managing the lifecycle budget of your project, but you should also be aware of the fiscal budget mechanism used by the organization as it may impact your project's budget

More Questions Like This