TOPIC: Free PMP® Exam Sample Question

You are in the process of developing an approximation of the monetary resources needed to complete project work for a large-scale multinational project, which will take at least seven years to complete. Your previous projects have all been domestic with short timeframes.

As part of the process you are currently performing, what might you need to do differently compared with your past projects?

A. Create a stakeholder engagement assessment matrix
B. Develop a more robust risk management plan
C. Consider additional enterprise environmental factors
D. Include additional organizational process assets

---

HINT: How might the Estimate Costs process differ with a large long-term multinational project?

---

All our questions are updated to the latest A Guide to the Project Management Body of Knowledge (PMBOK^® Guide) standard. Stop by at free.pm-exam-simulator.com/ and try the PM Exam Simulator free for 7 days. We are a trusted and experienced education provider.

Answer and Explanation:
The correct answer is C.

Developing an approximation of the monetary resources needed to complete project work is the main objective of the Estimate Costs process. Therefore, the question implies that you are conducting the Estimate Costs process and asks how this process will be affected by a large long-term multinational project.

Thus, the answer choices that relate to other project management processes can be eliminated as correct responses. With the project lasting at least seven years, the impact of inflation over the course of the project must be considered.

Additionally, since the project is international in scope, the project will likely be working with various currencies that will be subject to fluctuations in relative values. For large-scale projects that extend multiple years with multiple currencies, the fluctuations of currencies and inflation need to be understood and built into the Estimate Costs process.
Exchange rates and inflation are considered enterprise environmental factors. Therefore, of the available choices, considering additional enterprise environmental factors is the best response.

Details for each option:

A. Incorrect. A stakeholder engagement assessment matrix is a matrix that compares current and desired stakeholder engagement levels. A stakeholder engagement assessment matrix can be used for small or large projects but might be more important for large projects. However, a stakeholder engagement assessment matrix would be created as part of the Plan Stakeholder Engagement process rather than the Estimate Costs process implied by the question.

B. Incorrect. A large long-term multinational project will likely require a more robust risk management plan. However, the question is asking about the aspects of the Estimate Costs process, and the risk management plan is developed as an output of the Plan Risk Management process.

C. Correct. For large-scale projects that extend multiple years with multiple currencies, the fluctuations of currencies and inflation need to be understood and built into the Estimate Costs process. Exchange rates and inflation are considered enterprise environmental factors.

D. Incorrect. Organizational process assets that are typically used during the Estimate Costs process include cost estimating policies, cost estimating templates, and historical information including the lessons learned repository. These same assets are likely to be used for large or small projects. Although there may be some additional organizational process assets used for a large multinational project, there are aspects of the enterprise environmental factors associated with the Estimate Costs process that will have a more direct impact on the project.

Reference: A Guide to the Project Management Body of Knowledge (PMBOK^® Guide) – Sixth Edition, Project Management Institute Inc., 2017, Page(s) 243