APM PPQ Unit 3 QUESTIONS AND
CORRECT ANSWERS | NEW 2025
3.1.1 Give two cost tracking tools and techniques used to manage a project's
budget based on the business case and an understanding of cost estimates. -
ANSWER Bullseye diagram
vs
Finance system
3.1.2 critically evaluate the importance of cashflow and cashflow forecasting for a
project to ensure availability of funds when required and based on the life cycle
emterm-2ployed. - ANSWER Importance of cashflow - Fundamental to a
projects success. No cash, no project.
Importance of cashflow forecasting - Allows resource allocation, informs decision
making, informs risk management.
Evaluation - Predicting cashflow can be uncertain - based on assumptions which
could be wrong. Also very complex.
PMs should consult experts, regularly reviews and use expert tools.
3.1.3 critically evaluate why and how to establish cost trends and monitor the
financial performance of a project. - ANSWER Why - Monitor progress, identify
, deviations from plan, identify poor performance, predict future costs, manage
risks, inform corrective actions.
How - Bullseye diagram or finance dashboard.
3.1.4 critically evaluate the importance of cost analysis and its role in adjusting
cost management processes, budget allocations and updating final costs. -
ANSWER Adjusting Cost Management Processes - Identifying Inefficiencies,
Evaluating Value for Money
Budget Allocations - Informed Decision Making, Prioritisation
Updating Final Costs - Financial Reporting, Lessons Learned / Continuous
Improvement.
3.1.5 critically evaluate the importance of completing all financial transactions
before project closure. - ANSWER Why - accurate financial reporting, avoid
disputes, mitigates risks, avoids delays and extra costs of project.
Limitations - may be very difficult to do so because of unforeseen circumstances.
May need to extend project - PM could be under pressure.
PMs should consult experts, regularly review payment obligations and keep in
touch with suppliers.
3.2.1 critically analyse qualitative and quantitative approaches to risk
identification and analysis
CORRECT ANSWERS | NEW 2025
3.1.1 Give two cost tracking tools and techniques used to manage a project's
budget based on the business case and an understanding of cost estimates. -
ANSWER Bullseye diagram
vs
Finance system
3.1.2 critically evaluate the importance of cashflow and cashflow forecasting for a
project to ensure availability of funds when required and based on the life cycle
emterm-2ployed. - ANSWER Importance of cashflow - Fundamental to a
projects success. No cash, no project.
Importance of cashflow forecasting - Allows resource allocation, informs decision
making, informs risk management.
Evaluation - Predicting cashflow can be uncertain - based on assumptions which
could be wrong. Also very complex.
PMs should consult experts, regularly reviews and use expert tools.
3.1.3 critically evaluate why and how to establish cost trends and monitor the
financial performance of a project. - ANSWER Why - Monitor progress, identify
, deviations from plan, identify poor performance, predict future costs, manage
risks, inform corrective actions.
How - Bullseye diagram or finance dashboard.
3.1.4 critically evaluate the importance of cost analysis and its role in adjusting
cost management processes, budget allocations and updating final costs. -
ANSWER Adjusting Cost Management Processes - Identifying Inefficiencies,
Evaluating Value for Money
Budget Allocations - Informed Decision Making, Prioritisation
Updating Final Costs - Financial Reporting, Lessons Learned / Continuous
Improvement.
3.1.5 critically evaluate the importance of completing all financial transactions
before project closure. - ANSWER Why - accurate financial reporting, avoid
disputes, mitigates risks, avoids delays and extra costs of project.
Limitations - may be very difficult to do so because of unforeseen circumstances.
May need to extend project - PM could be under pressure.
PMs should consult experts, regularly review payment obligations and keep in
touch with suppliers.
3.2.1 critically analyse qualitative and quantitative approaches to risk
identification and analysis
