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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 12 of 15

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Q111.
What is the phenomenon known as "winner's curse" in software field?

a.

Software providers tend to overestimate the cost of most likely cost

b.

Software providers with over-optimistic estimates tend to have the lowest bids

c.

Software clients require a fixed-price contract

d.

All of the above

Discuss
Answer: (d).All of the above Explanation:The winner's curse is a phenomenon known from auctions where players are uncertain of the value of a good when they bid. In the software field, it has the characteristics that software providers differ in optimism in their estimates of most likely cost, software providers with over-optimistic estimates tend to have the lowest bids, and software clients require a fixed-price contract.
Q112.
According to Jorgensen (2005), what should be done to avoid the politically-colored estimation methods?

a.

Mix estimation, planning and bidding

b.

Combine estimation methods

c.

Ask for justification

d.

Select experts with experience from similar projects

Discuss
Answer: (b).Combine estimation methods Explanation:Jorgensen (2005) states that the politically-colored estimation methods mix up estimation, planning and bidding, and provides the guidelines of combining estimation methods, asking for justification, selecting experts with experience from similar projects, accept and assess uncertainty, provide learning opportunities, and consider postponing or avoiding effort estimation to avoid these methods.
Q113.
What is the outcome of a contract that results in low or negative profits to the bidder?

a.

A good outcome

b.

A bad outcome

c.

A neutral outcome

d.

A Pyrrhic victory

Discuss
Answer: (d).A Pyrrhic victory Explanation:The result often is a Pyrrhic victory, a contract that results in low or negative profits to the bidder.
Q114.
What is the main goal of estimation?

a.

Winning a contract

b.

Accuracy

c.

Risk assessment and schedule

d.

All of the above

Discuss
Answer: (b).Accuracy Explanation:Estimation’s only goal is accuracy.
Q115.
According to Jorgensen and Grimstad (2004), what is the result of companies with the lowest bids in an experiment they conducted?

a.

The greatest success

b.

The greatest profits

c.

The greatest risks

d.

The greatest losses

Discuss
Answer: (c).The greatest risks Explanation:Jørgensen and Grimstad (2004) describe an experiment in which they actually asked 35 companies for bids on a certain requirements specification. Next, four companies were asked to implement the system. They found that the companies with the lowest bids incurred the greatest risks.
Q116.
What is the benefit of combining different estimation methods?

a.

It reduces bias

b.

It increases accuracy

c.

It leads to lower costs

d.

It leads to higher profits

Discuss
Answer: (a).It reduces bias Explanation:Likewise, the combination of sufficiently different estimation methods gives better estimates. In this way, the bias that is inherent in a method or class of experts is mitigated.
Q117.
What is the best practice for improving estimates according to Lederer and Prasad (2000)?

a.

Using estimates in performance evaluations of software managers and professionals

b.

Asking for a justification of the estimate

c.

Estimating through comparison with earlier projects

d.

Combining different estimation methods

Discuss
Answer: (a).Using estimates in performance evaluations of software managers and professionals Explanation:Lederer and Prasad (2000) found that the use of estimates in performance evaluations of software managers and professionals is the only practice that leads to better estimates.
Q118.
What is the potential effect of experience on cost estimates in software development projects?

a.

Experience leads to more accurate and optimistic cost estimates

b.

Experience leads to more accurate and pessimistic cost estimates

c.

Experience leads to less accurate and pessimistic cost estimates

d.

Experience leads to higher productivity for subsequent projects

Discuss
Answer: (c).Experience leads to less accurate and pessimistic cost estimates Explanation:For lack of hard data, the cost of a software development project is often estimated through a comparison with earlier projects. If the estimator is very experienced, reasonable cost estimates may result. However, the learning effect of earlier experiences may lead to estimates that are too pessimistic in this case.
Q119.
What is the result of combining sufficiently different estimation methods?

a.

Lower estimates

b.

Higher estimates

c.

More accurate estimates

d.

Less accurate estimates

Discuss
Answer: (c).More accurate estimates Explanation:Combining sufficiently different estimation methods gives better estimates, which means that it results in more accurate estimates.
Q120.
Why may estimates that are based on comparison with earlier projects be too pessimistic?

a.

The estimator is not experienced enough

b.

The learning effect of earlier experiences

c.

The project is not similar enough to earlier projects

d.

The project has a shorter schedule

Discuss
Answer: (b).The learning effect of earlier experiences Explanation:If the estimator is very experienced, reasonable cost estimates may result. However, the learning effect of earlier experiences may lead to estimates that are too pessimistic in this case.
Page 12 of 15

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