Cost Management Question: Download Cost Management PDF

Who has the cost risk in a fixed price (FP) contract?

A. The team
B. The buyer
C. The seller
D. Management

Answer:

C. The seller

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Analogous estimating:

A. Uses bottom-up estimating techniques
B. Is used most frequently during the executing processes of the project
C. Uses top-down estimating techniques
D. Uses actual detailed historical cost

You have been asked to select between three projects. Project A has a net present value of $54,750 and will take six months to complete. Project B has a net present value of $85,100 and will take two years to complete. Project C has a net present value or $15,000 and a benefit-cost ratio of 5:2. Which project should you choose?

A. Project A
B. Project B
C. Project C
D. There is not enough information to decide.