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Welcome to the Cost Estimation MCQs Page

Dive deep into the fascinating world of Cost Estimation with our comprehensive set of Multiple-Choice Questions (MCQs). This page is dedicated to exploring the fundamental concepts and intricacies of Cost Estimation, a crucial aspect of Software Engineering. In this section, you will encounter a diverse range of MCQs that cover various aspects of Cost Estimation, from the basic principles to advanced topics. Each question is thoughtfully crafted to challenge your knowledge and deepen your understanding of this critical subcategory within Software Engineering.

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Check out the MCQs below to embark on an enriching journey through Cost Estimation. Test your knowledge, expand your horizons, and solidify your grasp on this vital area of Software Engineering.

Note: Each MCQ comes with multiple answer choices. Select the most appropriate option and test your understanding of Cost Estimation. You can click on an option to test your knowledge before viewing the solution for a MCQ. Happy learning!

Cost Estimation MCQs | Page 11 of 15

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Q101.
According to DeMarco, what is the main cause of politically-colored estimates?

a.

Lack of data about past projects

b.

Lack of expertise in the estimators

c.

Political arguments entering the arena

d.

Difficulty in collecting data

Discuss
Answer: (c).Political arguments entering the arena Explanation:According to DeMarco, politically-colored estimates can have disastrous effects and political arguments almost always play a role if estimates are being given by people directly involved in the project, such as the project manager, or someone reporting to the project manager.
Q102.
What is the "budget" method of cost estimation?

a.

Using a fixed budget for the project

b.

Using the estimates of the competitor's bid

c.

Scheduling the project to meet a specific deadline, regardless of the actual time needed

d.

Settling for a shorter time frame than what is actually needed

Discuss
Answer: (c).Scheduling the project to meet a specific deadline, regardless of the actual time needed Explanation:The "budget" method of cost estimation refers to scheduling the project to meet a specific deadline, regardless of the actual time needed, such as "We want to show our product at the trade show next year, so the software needs to be written and tested within the next nine months, though we realize that this is rather tight."
Q103.
What is the "price to win" method of cost estimation?

a.

Using a fixed budget for the project

b.

Using the estimates of the competitor's bid

c.

Scheduling the project to meet a specific deadline, regardless of the actual time needed

d.

Settling for a shorter time frame than what is actually needed

Discuss
Answer: (b).Using the estimates of the competitor's bid Explanation:The "price to win" method of cost estimation refers to using the estimates of the competitor's bid, such as "We know that our competitor put in a bid of $1M, so we need to schedule a bid of $0.9M."
Q104.
What is one of the main reasons for the lack of data collection in software projects?

a.

Insufficient budget for data collection

b.

Lack of time to collect data

c.

Lack of importance placed on data collection

d.

Lack of expertise in data collection

Discuss
Answer: (b).Lack of time to collect data Explanation:The importance of a database of past projects is now widely recognized, but data is not routinely collected on current projects because there simply is not enough time to collect data; developers are too focused on writing software.
Q105.
What is one of the main traps to be avoided when using other methods for cost estimation based on the expertise of estimators?

a.

Lack of data about past projects

b.

Lack of expertise in the estimators

c.

Political arguments entering the arena

d.

Insufficient budget for data collection

Discuss
Answer: (c).Political arguments entering the arena Explanation:It is particularly important to prevent political arguments from entering the arena when using other methods for cost estimation based on the expertise of estimators.
Q106.
What is the main disadvantage of politically-colored estimates?

a.

They are not accurate

b.

They are not reliable

c.

They can have disastrous effects

d.

They are not based on past data

Discuss
Answer: (c).They can have disastrous effects Explanation:The politically-colored estimates can have disastrous effects as they have been shown all too often during the short history of the field.
Q107.
According to Jørgensen (2005) what should be avoided in expert-based effort estimation?

a.

Mixing estimation, planning, and bidding

b.

Combining estimation methods

c.

Asking for justification

d.

Selecting experts without experience

Discuss
Answer: (a).Mixing estimation, planning, and bidding Explanation:Jørgensen (2005) states that mixing estimation, planning, and bidding should be avoided as they have different goals and can lead to inaccuracies in cost estimation.
Q108.
What is the goal of estimation according to Jørgensen (2005)?

a.

Risk assessment and schedule

b.

Winning a contract

c.

Accuracy

d.

None of the above

Discuss
Answer: (c).Accuracy Explanation:Jørgensen (2005) states that the goal of estimation is accuracy and should not be mixed with planning and bidding which have different goals.
Q109.
What is the Winner's curse phenomenon known from auctions?

a.

The highest bid wins, but the winner may be left with an item that's worth less than paid for

b.

The lowest bid wins, but the winner may be left with an item that's worth more than paid for

c.

The highest bid wins, and the winner is guaranteed that the item is worth what they paid for

d.

None of the above

Discuss
Answer: (a).The highest bid wins, but the winner may be left with an item that's worth less than paid for Explanation:The Winner's curse phenomenon is known from auctions, where players are uncertain of the value of a good when they bid and the highest bid wins, but the winner may be left with an item that's worth less than paid for.
Q110.
What type of contracts do software clients generally require according to Jørgensen and Grimstad (2004)?

a.

Time and material contracts

b.

Cost-plus contracts

c.

Fixed-price contracts

d.

None of the above

Discuss
Answer: (c).Fixed-price contracts Explanation:Jørgensen and Grimstad (2004) mention that software clients generally require fixed-price contracts which can lead to the winner's curse phenomenon if software providers have over-optimistic estimates.
Page 11 of 15

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