A project manager is designing a spend tracking plan for a project with a tight budget and a fast-paced schedule. The finance department requires weekly cost reports, but the project team is small and has limited administrative capacity. The project sponsor wants to be alerted immediately if costs exceed 5% of the budget. What is the most efficient approach?

Track costs only at the end of each month and report to the sponsor if the variance exceeds 5%.

Assign a dedicated cost controller to manually track and report weekly.

Implement automated tracking tools that flag variances in real-time and generate weekly reports automatically.

Use a simple spreadsheet updated daily by the project manager.

A project manager discovers that the project will exceed its budget by $50,000 due to an unforeseen regulatory requirement. The project has a management reserve of $100,000. According to governance processes, what should the project manager do?

Use the management reserve immediately to cover the overrun.

Ignore the overrun until the end of the project.

Escalate the issue to the project sponsor and request approval to use the management reserve.

Reduce the project scope to avoid the overrun.

What is the purpose of quantifying risks for contingency in project finance?

To define the format and schedule of financial reports

To identify the total financial resources required for the project's scope

To determine the amount of contingency reserves needed to cover potential cost impacts of identified risks

To track actual expenditures against the budget

A project manager has a contingency reserve of $100,000. The risk register lists three risks: a supplier delay (probability 40%, impact $80,000), a regulatory change (probability 20%, impact $150,000), and a technical failure (probability 10%, impact $200,000). The project manager must allocate contingency to specific work packages. What is the best allocation approach?

Allocate $100,000 to the supplier delay because it has the highest probability.

Allocate $32,000 to supplier delay, $30,000 to regulatory change, and $20,000 to technical failure, keeping $18,000 unallocated.

Allocate $40,000 to each of the three risks equally.

Allocate the full $80,000 to supplier delay, $20,000 to regulatory change, and $0 to technical failure.

Project Management Professional (PMP)

Domain 2Objective 6

Task 6 Plan and Manage Finance PMP Practice Questions (Page 1)

Part of the Process domain, which accounts for 41% of the PMP exam. PMI does not publish an official question count, but from its 230-minute exam (~90–155 total, ~37–64 in this domain), expect 4–6 from this objective — we provide 32 practice questions to prepare you well beyond it. (estimate)

32questions here

7free pages

9concepts

41%of the exam

Questions 1–5

1expert · hard
A project manager is designing a spend tracking plan for a project with a tight budget and a fast-paced schedule. The finance department requires weekly cost reports, but the project team is small and has limited administrative capacity. The project sponsor wants to be alerted immediately if costs exceed 5% of the budget. What is the most efficient approach?
Select an answer first
2application · medium
A project manager discovers that the project will exceed its budget by $50,000 due to an unforeseen regulatory requirement. The project has a management reserve of $100,000. According to governance processes, what should the project manager do?
Select an answer first
3foundation · easy
What is the purpose of quantifying risks for contingency in project finance?
Select an answer first
4application · medium
A project manager has a contingency reserve of $100,000. The risk register lists three risks: a supplier delay (probability 40%, impact $80,000), a regulatory change (probability 20%, impact $150,000), and a technical failure (probability 10%, impact $200,000). The project manager must allocate contingency to specific work packages. What is the best allocation approach?
Select an answer first
5foundation · easy
Which metric is commonly used to analyze financial variations?
Select an answer first

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Task 6 Plan and Manage Finance PMP Practice Questions (Page 1)

Questions 1–5

A project manager discovers that the project will exceed its budget by $50,000 due to an unforeseen regulatory requirement. The project has a management reserve of $100,000. According to governance processes, what should the project manager do?

What is the purpose of quantifying risks for contingency in project finance?

Which metric is commonly used to analyze financial variations?

Keep studying — Process