Consider the Following Project Circumstances

question 1

Multiple Choice

Consider the following project circumstances. Assume the information is accurate.
PV = $5,000,000
EV = $9,000,000
AC = $12,000,000
BAC = $15,000,000
Estimated Duration = 24 months
Elapsed Time To Date = 15 months
The project sponsor has called the PM into her office and asked the PM to resolve the most serious problem represented by the data shown above. Which of these options would be most appropriate and important for the PM to consider first in following the sponsor's request?

• A) Crash critical path activities to compress the schedule.
• B) Negotiate a later due date.
• C) Add WBS items to match customer expectations
• D) Work with suppliers to expedite deliveries and catch up on schedule delays
• E) Check for scope creep
• F) A and B only

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable costs are deducted, indicating how much contributes to covering fixed costs and generating profit.

Pretax Income

The income earned by a business before any taxes have been deducted.

Target Pretax Income

The income a company aims to achieve before deducting taxes, often set for budgeting or goal-setting purposes.

Budgeted Income Statement

A financial report projecting revenue, expenses, and net income for a future period, based on management's expectations.