PMP Question #628: Real Exam Question with Answer & Explanation

Question

A new project needs to be submitted for urgent funding approval. The project, which will use a new technology, is vital to the organization. The entire Scrum team has worked together for over 3 years on multiple projects and delivered the previous project under the approved budget. Which estimation technique should the project manager implement in this context?

Options

• ADefinitive estimate
• BOrder of magnitude
• CBudget estimate
• DStory points

Explanation

For urgent funding approval of a project using new technology, an order of magnitude estimate is appropriate as it provides a quick, high-level cost assessment suitable for initial proposals.

Common mistakes.

• A. A definitive estimate is highly accurate (-5% to +10%) and requires significant detailed planning, which is not feasible for urgent funding approval of a project with new technology.
• C. A budget estimate has a moderate level of accuracy (-10% to +25%) and is typically used for budget allocation, but still requires more detail than available for urgent, early-stage funding of new technology projects.
• D. Story points are an agile estimation technique for effort, not a direct monetary cost estimation technique for urgent funding approval, and are typically used by the development team during sprint planning.

Concept tested. Project cost estimation techniques (early stage)

Reference. https://www.pmi.org/pmbok-guide-standards/foundational/pmbok

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