Project Management Professional (PMP) — Question 1352

Important projects in the portfolio backlog need to be delivered. Budget estimates are needed to prioritize the projects.
How should the project budgets be estimated?

Answer options

• A. The project is decomposed into features and based on the feature value and the velocity of the team, the team provides the estimate
• B. Budget estimates are provided based on the experience of the sponsor, product owner and team facilitator
• C. The team facilitator uses historical data and arrives at an estimate based on the nature of the project.
• D. The product owner obtains all project details and based on the team's experience and velocity provides a budget estimate

Correct answer: A

Explanation

Option A is correct because it involves decomposing the project into features and leveraging the team's velocity and feature value for accurate budget estimates. Options B, C, and D rely on subjective judgment or historical data, which may not reflect the current project's specifics or dynamics, making them less effective for precise budget estimation.