3FOLD EXECUTIVE EDUCATION CENTRE

PART 2 – COST ESTIMATING AND CONTROL

Closed Book Exam

Section A

Q1. You have recently completed a 750 MW power plant with the total cost of AED 270 Million.
You have been assigned to prepare a ball park estimate for new 870 MW powerplant. Historical
information suggests you to use 0.60 Exponent.

Based on this scenario, answer the following questions:

1. What is the most relevant technique to use for this scenario?

a) Physical Dimension Method
b) Ratio or Factor Methods
c) Parametric Method
d) Capacity Factor Method

2. What is the equation for Capacity Factor Method?

a) $B = ($A) (CapB / CapA)e
b) $A = ($B) (CapB / CapA)e
c) $A = ($B) (CapB / CapA)e
d) $B = ($A) (CapA / CapB)e

3. What is the exponent range typically used for Capacity Factor Method?
a) 0.4 to 0.89
b) 0.5 to 0.85
c) 0.6 to 0.78
d) 0.1 to 1.0

4. As per AACE International classification, this estimation will provide you with what class of
accuracy?
a) Class 5
b) Class 4
c) Class 3

F25, Blo ck 2B , Kno w ledge Vi llage, Du b ai , UA E. Pho ne: + 9 71 4 369 09 22

25, 1 s t Floo r, L.B . R o ad, Adyar, Chennai , I ndi a. Pho ne: + 91 44 24463 63 2
i nf o @3 f o ldt rai ni ng.co m w ww .3 f o ldt rai ni ng.co m
 3FOLD EXECUTIVE EDUCATION CENTRE

PART 2 – COST ESTIMATING AND CONTROL

Closed Book Exam
d) Class 2

5. What will be new plant cost based on e=.70?

a) 300 Million
b) 290 Million
c) 301 Million
d) 333 Million

6. If the new project doesn’t have some scope worth 50 Million, which you have completed in the
last project, what will be new project cost?
a) 240 Million
b) 244 Million
c) 248 Million
d) 241 Million

7. If the exponent / proration factor increases, what will be the effect on new project cost?
a) There will be a further increase in new project cost
b) There will be a further decrease in new project cost
c) There will be no effect on new project cost
d) None of the above

F25, Blo ck 2B , Kno w ledge Vi llage, Du b ai , UA E. Pho ne: + 9 71 4 369 09 22

25, 1 s t Floo r, L.B . R o ad, Adyar, Chennai , I ndi a. Pho ne: + 91 44 24463 63 2
i nf o @3 f o ldt rai ni ng.co m w ww .3 f o ldt rai ni ng.co m
 3FOLD EXECUTIVE EDUCATION CENTRE

PART 2 – COST ESTIMATING AND CONTROL

Closed Book Exam

Q2. With respect to AACEI and ANSI estimating classification, answer the following seven
questions.

1. AACEI Class 5 falls under which ANSI estimating classification?

a) Order of Magnitude
b) Budget Estimate
c) Definitive Estimate
d) None of the above

2. Which of the following statement is not true?

a) Order of Magnitude has an accuracy range of -30% to +50%
b) Definitive Estimate has an accuracy range of -10% to +15%
c) Budget Estimate has an accuracy range of -15% to +30%
d) Order of Magnitude estimate is also called as ball park estimate

3. An accuracy range of -15% to + 30% for a process industry falls under which class of estimate?
a) Class 1 – Definitive Estimate
b) Class 2 – Definitive Estimate
c) Class 3 - Budget Estimate
d) Class 4 – ROM Estimate

4. If you want to prepare estimation for bidding purpose, what class of estimate would you suggest?
a) Class 3 – Budget Estimate
b) Class 5 – ROM
c) Class 2 – Definitive Estimate
d) Class 4 – Budget Estimate

F25, Blo ck 2B , Kno w ledge Vi llage, Du b ai , UA E. Pho ne: + 9 71 4 369 09 22

25, 1 s t Floo r, L.B . R o ad, Adyar, Chennai , I ndi a. Pho ne: + 91 44 24463 63 2
i nf o @3 f o ldt rai ni ng.co m w ww .3 f o ldt rai ni ng.co m
 3FOLD EXECUTIVE EDUCATION CENTRE

PART 2 – COST ESTIMATING AND CONTROL

Closed Book Exam

5. As a contractor what class of estimation you would prepare for lump sum contract?
a) Class 3
b) Class 4
c) Class 5
d) Class 1

6. Of the following, comparatively, which estimate requires least amount of effort to prepare?
a) Forced Detail
b) Definitive Estimate
c) Budget Estimate
d) Detailed Control Estimate

7. An estimate prepared using Capacity factor method falls under what AACEI Estimation class?
a) Class 5
b) Class 4
c) Class 3
d) Order of Magnitude / Ball Park

F25, Blo ck 2B , Kno w ledge Vi llage, Du b ai , UA E. Pho ne: + 9 71 4 369 09 22

25, 1 s t Floo r, L.B . R o ad, Adyar, Chennai , I ndi a. Pho ne: + 91 44 24463 63 2
i nf o @3 f o ldt rai ni ng.co m w ww .3 f o ldt rai ni ng.co m
 3FOLD EXECUTIVE EDUCATION CENTRE

PART 2 – COST ESTIMATING AND CONTROL

Closed Book Exam

Q3. Calculate EVM metrics for the following test problems:

Plan at End of 2nd Quarter: Tasks 1, 3, 5 and 6 should be completed, Tasks 2 and 4 should be 96
percent complete, and Task 7 should be 51 percent complete.

Results at End of 2nd Quarter: Tasks 1, 3, 5, and 6 have been completed, Task 2 is 50 percent
complete, Task 4 has not been started, and Task 7 is 10 percent complete. $137,500 has been
charged to the project.

Calculate the following values (assume that all tasks incur costs uniformly over time):

1. At project initiation, what was the total projected cost of this project (BAC)?
a) $289000
b) $390000
c) $280000
d) $309000

2. On the status date, what is the budgeted cost of work scheduled (PV)?
a) $168570
b) $178540

F25, Blo ck 2B , Kno w ledge Vi llage, Du b ai , UA E. Pho ne: + 9 71 4 369 09 22

25, 1 s t Floo r, L.B . R o ad, Adyar, Chennai , I ndi a. Pho ne: + 91 44 24463 63 2
i nf o @3 f o ldt rai ni ng.co m w ww .3 f o ldt rai ni ng.co m
 3FOLD EXECUTIVE EDUCATION CENTRE

PART 2 – COST ESTIMATING AND CONTROL

Closed Book Exam
c) $165000
d) $187000

3. What is the actual cost (AC) on the status date?

a) $147800
b) $137500
c) $157500
d) $190000

4. What is the earned value (EV) of this project on the status date?
a) $118900
b) $190000
c) $129000
d) $129800

5. What is the project cost performance?

a) Over Budget
b) Under Budget
c) On Target
d) Cost on Target but Schedule Delay

6. What is the project schedule performance?

a) Behind the Schedule
b) Ahead of the Schedule
c) On Time
d) Schedule on target but Cost overrun

7. Calculate EAC assuming the same performance continues.

a) $306144
b) $300500
c) $290000
d) $189000

F25, Blo ck 2B , Kno w ledge Vi llage, Du b ai , UA E. Pho ne: + 9 71 4 369 09 22

25, 1 s t Floo r, L.B . R o ad, Adyar, Chennai , I ndi a. Pho ne: + 91 44 24463 63 2
i nf o @3 f o ldt rai ni ng.co m w ww .3 f o ldt rai ni ng.co m
 3FOLD EXECUTIVE EDUCATION CENTRE

PART 2 – COST ESTIMATING AND CONTROL

Closed Book Exam

Section B

01. Given:
BACWP =200
ACWP =120
BCWP =80
CPI =0.666
Assuming that current variances are atypical, and that similar variances will not occur in the future,
the estimate at completion (EAC) is:
a) 120.
b) 160.
c) 200.
d) 240.

02. Given:
BAC =200
ACWP =120
BCWP =80
CPI =0.666
Assuming that current variances are typical of future variances, the estimate at completion (EACWP)
is:
a) 220.
b) 260.
c) 300.
d) 320.

03. The cost baseline has all of the following characteristics EXCEPT:
a) It is a time-phased budget that will be used to measure and monitor cost performance on
the project.
b) It shows the actual cost expenditures throughout the life of the project.

F25, Blo ck 2B , Kno w ledge Vi llage, Du b ai , UA E. Pho ne: + 9 71 4 369 09 22

25, 1 s t Floo r, L.B . R o ad, Adyar, Chennai , I ndi a. Pho ne: + 91 44 24463 63 2
i nf o @3 f o ldt rai ni ng.co m w ww .3 f o ldt rai ni ng.co m
 3FOLD EXECUTIVE EDUCATION CENTRE

PART 2 – COST ESTIMATING AND CONTROL

Closed Book Exam
c) It is developed by summing estimated costs by period.
d) It is usually displayed in the form of an S-curve.

04. The estimate at completion (EAC) is the projected or anticipated total final value for a schedule
activity, WBS component, or project when the defined work of the project is completed. To
determine the EAC, assuming no management intervention, which of the following information is
needed?
a) The Earned Value (BCWP) and the actual Cost to date (ACWPC).
b) The Cost Performance Index (CPI) and the Cost Variance (CV).
c) The Actual Cost to date (ACWPC) and the Cost Performance Index (CPI).
d) The Actual Cost to date (ACWPC) and the Estimate To Complete (ETC).

05. Your schedule analysis has shown that your project has a high likelihood of experiencing a
schedule overrun. You know this because the cumulative BCWP is much:
a) Higher than the cumulative ACWP.
b) Higher than the cumulative BCWS.
c) Lower than the cumulative BCWS.
d) Lower than the cumulative CPI.

06. Which of the following choices indicates that your project is 9% under budget?
a) The cumulative ACWP was 100, and the cumulative BCWP was 110.
b) The cumulative BCWS was 100, and the cumulative ACWP was 110.
c) The cumulative ACWP was 110, and the cumulative BCWP was 100.
d) The cumulative BCWP was 100, and the cumulative BCWS was 110.

07. During the sixth monthly update on a ten-month, $30,000 project, the analysis shows that the
cumulative BCWS is $20,000, the cumulative ACWP is $10,000, and the cumulative BCWP is $15,000.
In planning its action, management can conclude all of the following from these figures EXCEPT:
a) Less has been accomplished than was planned.
b) Less has been spent than planned.
c) Continuing performance at the same efficiency with no management intervention, the
project will probably be completed ahead of schedule and over budget.

F25, Blo ck 2B , Kno w ledge Vi llage, Du b ai , UA E. Pho ne: + 9 71 4 369 09 22

25, 1 s t Floo r, L.B . R o ad, Adyar, Chennai , I ndi a. Pho ne: + 91 44 24463 63 2
i nf o @3 f o ldt rai ni ng.co m w ww .3 f o ldt rai ni ng.co m
 3FOLD EXECUTIVE EDUCATION CENTRE

PART 2 – COST ESTIMATING AND CONTROL

Closed Book Exam
d) Continuing performance at the same efficiency with no management intervention, the
project will probably be completed behind schedule and under budget.

08. In the earned value technique, cost variance is computed as:

a) BCWP minus BCWS.
b) BCWP minus ACWP.
c) ACWP minus BCWP.
d) BCWS minus BCWP.

09. Earned value (BCWP) involves all of the following EXCEPT:

a) The originally allocated budget amount.
b) Actual cost.
c) Value of the budgeted cost of work performed.
d) Budgeted amount for the work actually completed.

10. If cumulative BCWS = 100, cumulative BCWP = 98, and cumulative ACWP = 104, the project is:
a) Ahead of schedule.
b) Headed for a cost overrun.
c) Operating at project cost projections.
d) Likely to come in under budget at completion.

Cumulative data for questions 11-12:

Item BCWS ACWP BCWP
1 10,000 11,000 10,000
2 9,000 8,000 7,000
3 8,000 8,000 8,000
4 7,000 7,000 5,000

11. Which item is MOST over budget?

a) Item 1
b) Item 2
c) Item 3
d) Item 4
12. Which item has the LOWEST SPI?
a) Item 1

F25, Blo ck 2B , Kno w ledge Vi llage, Du b ai , UA E. Pho ne: + 9 71 4 369 09 22

25, 1 s t Floo r, L.B . R o ad, Adyar, Chennai , I ndi a. Pho ne: + 91 44 24463 63 2
i nf o @3 f o ldt rai ni ng.co m w ww .3 f o ldt rai ni ng.co m
 3FOLD EXECUTIVE EDUCATION CENTRE

PART 2 – COST ESTIMATING AND CONTROL

Closed Book Exam
b) Item 2
c) Item 3
d) Item 4

F25, Blo ck 2B , Kno w ledge Vi llage, Du b ai , UA E. Pho ne: + 9 71 4 369 09 22

25, 1 s t Floo r, L.B . R o ad, Adyar, Chennai , I ndi a. Pho ne: + 91 44 24463 63 2
i nf o @3 f o ldt rai ni ng.co m w ww .3 f o ldt rai ni ng.co m