PMT 3600V EXAM 5: ADVANCED
PROGRAM MANAGEMENT CONCEPTS
QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS 2026/2027
UPDATE. JUST RELEASED
1. A project has a Budget at Completion (BAC) of $1,000,000. Currently, the BCWP is $400,000
and the ACWP is $450,000. If the remaining work is expected to be performed at the
budgeted rate, what is the Estimate at Completion (EAC)?
A. $950,000
B. $1,125,000
C. $1,000,000
D. $1,050,000
Answer: D
Conceptual Explanation: The formula for EAC when remaining work is performed at the
budgeted rate is EAC = ACWP + (BAC - BCWP). Here, EAC = 450,000 + (1,000,000 -
400,000) = 450,000 + 600,000 = $1,050,000.
2. Which of the following describes the ‘To-Complete Performance Index’ (TCPI) based on the
BAC?
A. (BAC - ACWP) / (BAC - BCWP)
,B. (BAC - BCWP) / (BAC - ACWP)
C. (BAC - BCWP) / (EAC - ACWP)
D. BCWP / ACWP
Answer: B
Conceptual Explanation: TCPI based on BAC is calculated as the work remaining (BAC -
BCWP) divided by the funds remaining (BAC - ACWP).
3. In the context of the EIA-748 Earned Value Management System (EVMS) guidelines,
Guideline 6 refers to:
A. Objectively measuring work progress
B. Defining the Work Breakdown Structure (WBS)
C. Establishing the Performance Measurement Baseline
D. Scheduling the work
Answer: D
Conceptual Explanation: Guideline 6 of the 32 EIA-748 guidelines focuses on scheduling
the work, ensuring a logical sequence of activities that support project milestones.
4. A Program Manager notices a Schedule Performance Index (SPI) of 0.85 and a Cost
Performance Index (CPI) of 1.15. Which statement best describes the project status?
A. Ahead of schedule and over budget
B. Ahead of schedule and under budget
, C. Behind schedule and under budget
D. Behind schedule and over budget
Answer: C
Conceptual Explanation: An SPI less than 1.0 indicates the project is behind schedule. A
CPI greater than 1.0 indicates the project is under budget.
5. What is the primary purpose of a Management Reserve (MR)?
A. To cover anticipated cost increases in work packages
B. To reward contractors for exceptional performance
C. To handle unknown unknowns and unforeseen project risks
D. To pay for scope changes requested by the customer
Answer: C
Conceptual Explanation: Management Reserve is an amount of the total budget withheld
for management control purposes to cover unforeseen risks or ‘unknown unknowns’
within the project scope.
6. Which contract type carries the highest risk for the contractor?
A. Cost Plus Fixed Fee (CPFF)
B. Fixed Price Incentive Firm (FPIF)
C. Cost Plus Incentive Fee (CPIF)
PROGRAM MANAGEMENT CONCEPTS
QUESTIONS AND ANSWERS WITH
VERIFIED SOLUTIONS 2026/2027
UPDATE. JUST RELEASED
1. A project has a Budget at Completion (BAC) of $1,000,000. Currently, the BCWP is $400,000
and the ACWP is $450,000. If the remaining work is expected to be performed at the
budgeted rate, what is the Estimate at Completion (EAC)?
A. $950,000
B. $1,125,000
C. $1,000,000
D. $1,050,000
Answer: D
Conceptual Explanation: The formula for EAC when remaining work is performed at the
budgeted rate is EAC = ACWP + (BAC - BCWP). Here, EAC = 450,000 + (1,000,000 -
400,000) = 450,000 + 600,000 = $1,050,000.
2. Which of the following describes the ‘To-Complete Performance Index’ (TCPI) based on the
BAC?
A. (BAC - ACWP) / (BAC - BCWP)
,B. (BAC - BCWP) / (BAC - ACWP)
C. (BAC - BCWP) / (EAC - ACWP)
D. BCWP / ACWP
Answer: B
Conceptual Explanation: TCPI based on BAC is calculated as the work remaining (BAC -
BCWP) divided by the funds remaining (BAC - ACWP).
3. In the context of the EIA-748 Earned Value Management System (EVMS) guidelines,
Guideline 6 refers to:
A. Objectively measuring work progress
B. Defining the Work Breakdown Structure (WBS)
C. Establishing the Performance Measurement Baseline
D. Scheduling the work
Answer: D
Conceptual Explanation: Guideline 6 of the 32 EIA-748 guidelines focuses on scheduling
the work, ensuring a logical sequence of activities that support project milestones.
4. A Program Manager notices a Schedule Performance Index (SPI) of 0.85 and a Cost
Performance Index (CPI) of 1.15. Which statement best describes the project status?
A. Ahead of schedule and over budget
B. Ahead of schedule and under budget
, C. Behind schedule and under budget
D. Behind schedule and over budget
Answer: C
Conceptual Explanation: An SPI less than 1.0 indicates the project is behind schedule. A
CPI greater than 1.0 indicates the project is under budget.
5. What is the primary purpose of a Management Reserve (MR)?
A. To cover anticipated cost increases in work packages
B. To reward contractors for exceptional performance
C. To handle unknown unknowns and unforeseen project risks
D. To pay for scope changes requested by the customer
Answer: C
Conceptual Explanation: Management Reserve is an amount of the total budget withheld
for management control purposes to cover unforeseen risks or ‘unknown unknowns’
within the project scope.
6. Which contract type carries the highest risk for the contractor?
A. Cost Plus Fixed Fee (CPFF)
B. Fixed Price Incentive Firm (FPIF)
C. Cost Plus Incentive Fee (CPIF)
