[2025] Pass CIPS L6M5 Exam Updated 85 Questions
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NEW QUESTION # 42
Scenario (same as Question 16):
Fin Inc is working with the new client. What type of costing system is being used?
- A. open book
- B. bottom up
- C. bill of quantities
- D. fixed fee
Answer: A
Explanation:
An open book costing system involves sharing financial details transparently between the parties.
NEW QUESTION # 43
Which of the following pieces of information is required to create a Bill of Quantities? Select all that apply
- A. price of material
- B. volume of materials used
- C. manufacturer of material
- D. quality of materials
- E. dimensions of materials
Answer: A,B,E
Explanation:
A Bill of Quantities is based on the volume/dimensions and price of the materials. Quality and manufacturer details are typically specified elsewhere.
NEW QUESTION # 44
Scenario:
Fin Inc is a consultancy organisation in the private sector, founded 10 years ago by CEO Geoff Davies, who runs a tight ship. Many employees are scared of Geoff, and there are rumours that he fires people for refusing overtime. Fin Inc is working with a new client on a shopping centre project led by the well-liked CFO. The client wants a flexible, collaborative contract with transparent cost-sharing.
What type of organisational structure does Fin Inc have?
- A. role
- B. power
- C. person
- D. task
Answer: B
Explanation:
The structure is centred around the CEO's authoritative style, which is indicative of a power-based structure.
NEW QUESTION # 45
Which of the following is true about Engineering, Procurement, and Construction (EPC) Contracts? (Select all that apply.) EPC contracts, commonly referred to as Turnkey Projects, are widely used in construction and infrastructure projects. These contracts require the contractor to design, procure materials, and construct the project to deliver a complete and operational facility to the client.
Answer Options:
- A. These contracts are commonly known as Turnkey Projects
- B. These contracts are used when forming a partnership between a private and public organization
- C. These contracts are sometimes referred to as Design and Build Contracts
- D. The contractor is responsible for the design aspect of the construction
- E. The contractor may operate the building for a certain period after completion
Answer: A,C,D
Explanation:
The correct answers are 1, 3, and 4 (p.8). Option 2 is incorrect as it describes a DBO (Design-Build-Operate) contract rather than an EPC contract. Option 5 is incorrect because it describes a PPP (Public-Private Partnership) contract, not an EPC contract. [P.8]
NEW QUESTION # 46
Which elements define an organization's culture? (Select all that apply.)
- A. Attitudes and customs
- B. Beliefs and assumptions
- C. Ways of interacting
- D. The physical environment
Answer: A,B,C,D
Explanation:
Organizational culture (p.154) consists of:
Beliefs, interactions, environment, and customs.
Financial standing does not define culture, making it incorrect. [P.154]
NEW QUESTION # 47
Liability limitation often focuses on which of the following types of loss, which is said to be the most unpredictable and most significant in the case of a default on a contract?
- A. anticipatory
- B. repudiatory
- C. direct
- D. consequential
Answer: D
Explanation:
Consequential loss is considered the most unpredictable and significant, hence it is often the focus of liability limitations.
NEW QUESTION # 48
Which of the following statements about liquidated damages are TRUE? Select all that apply
- A. the figure must be a genuine estimate of the loss
- B. a set figure is decided in advance
- C. the party seeking damages must prove the actual loss in the event of a claim
- D. liquidated damages can be claimed when a warranty is breached
- E. specific performance is a type of liquidated damage
Answer: A,B,D
Explanation:
The correct statements are that a set figure is decided in advance, it must be a genuine estimate of the loss, and liquidated damages can be claimed when a warranty is breached.
NEW QUESTION # 49
What is the purpose of Cybernetic Control within Project Management?
Answer Options:
- A. To reduce errors
- B. To monitor progress
- C. To increase value
- D. To assign resources
Answer: A
Explanation:
Cybernetic Control reduces errors by monitoring distortions in a project (p.112-113). It uses automated tracking systems to signal when deviations occur, enabling quick corrective actions. Option A relates to resource planning, C to project valuation, and D to general tracking, but not specifically error reduction. [P.112-113]
NEW QUESTION # 50
Petra is setting up a contract for a new construction project that must be robust with little flexibility. The contract stipulates that the client will bear the risk of unforeseen negative circumstances. Which type of contract is most suitable?
- A. NEC
- B. IMechE
- C. FIDIC
- D. JCT
Answer: C
Explanation:
FIDIC contracts are known for their robustness and low flexibility, placing risk on the client.
NEW QUESTION # 51
Robyn has created a contract for a construction project and has used "The Red Book." Q: Which professional organization is responsible for creating this contract?
Answer Options:
- A. NEC
- B. CIPS
- C. FIDIC
- D. JCT
Answer: C
Explanation:
The Red Book is part of the FIDIC "Rainbow Suite" of contracts (p.40). FIDIC contracts are categorized by color, each serving a specific purpose in construction and engineering projects. [P.40]
NEW QUESTION # 52
Danger Incorporated is estimating the costs for a new project called the Ninja Project using an algorithm based on the project's scope, duration, and complexity. What type of cost estimate is being used?
- A. parametric
- B. expert judgement
- C. analogous
- D. bottom-up
Answer: A
Explanation:
Using an algorithm based on key parameters is characteristic of a parametric cost estimate.
NEW QUESTION # 53
Skipped
Bruce is an entrepreneur who runs a small candle-making business that employs 10 people. He has recently completed a project outlining how he wishes to expand the business into making soaps. The project was a success, and Bruce is now feeding back to his team on what went well and what didn't go well with the project. What type of knowledge is Bruce sharing?
- A. Evaluative
- B. Explicit
- C. Tacit
- D. Procedural
Answer: C
Explanation:
Tacit knowledge is the correct answer. Of the options listed, only explicit and tacit are types of knowledge, so you can discount options C and D. The study guide states on p. 147: "Many of the lessons learned by project managers fall under the category of tacit knowledge." Domain: 2.4
NEW QUESTION # 54
Ali is a team manager at his organisation and has been instructed by senior leadership to implement a change that requires his staff to come into the office an hour earlier than usual. Although he knows the change won't be popular, he plans to tell his team that the change will start next month and insinuate that non-compliance may affect promotion eligibility. What type of influence is Ali exerting?
- A. explicit coercion
- B. implied coercion
- C. bribery
- D. persuasion
Answer: B
Explanation:
Ali is implying negative consequences rather than stating them directly, which is known as implied coercion.
NEW QUESTION # 55
Glitter Kitten Ltd is considering two expansion options. The CEO wants a quick analysis and uses the Payback Method.
Q: What financial metric is the leadership team using for expansion?
Answer Options:
- A. Return rate
- B. Interest rate
- C. Discount rate
- D. Bank rate
Answer: C
Explanation:
Net Present Value (NPV) calculations require a discount rate (p.1.4).
Bank rate (B) relates to loans, not investment decisions.
Interest rate (C) applies to borrowing, not profitability.
Return rate (D) is not the main NPV metric. [P.1.4]
NEW QUESTION # 56
Cactus Construction is the Principal Contractor on a housing estate project under an NEC contract. Which of the following scenarios would be a mandatory variation?
- A. the project falls behind the plan due to staff shortages
- B. the client changes their opinion on the design
- C. changes to building regulations
- D. raw material prices increase
Answer: C
Explanation:
Changes to building regulations are mandatory because they are legally binding and require compliance.
NEW QUESTION # 57
Which of the following statements about NEC contracts are true? Select all that apply
- A. The contracts are designed to be flexible and allow for a range of payment options
- B. The suite of contracts is commonly known as the Rainbow Suite
- C. The contracts are commonly used in the IT and financial industries
- D. The contracts are commonly used in the private sector
- E. The contracts use simple English in the present tense
Answer: A,E
Explanation:
NEC contracts are designed to be flexible with various payment options and use simple, present-tense English.
NEW QUESTION # 58
When is the best time to define acceptance criteria for a project?
Answer Options:
- A. When writing the Project Initiation Document
- B. As part of the Project Audit
- C. During each milestone
- D. Upon completion
Answer: A
Explanation:
Acceptance Criteria should be set before the project starts in the Project Initiation Document (PID) (p.137).
Option A is too late, as the project is already completed.
Option B is iterative, but criteria should be predefined.
Option D is for evaluation, not definition. [P.137]
NEW QUESTION # 59
When is a cost-plus pricing arrangement most likely to be used?
Answer Options:
- A. In low-risk, low-value purchases
- B. Where there is a low level of trust between supplier and buyer
- C. In high-risk environments
- D. In international transactions
Answer: C
Explanation:
Cost-plus pricing is best suited for high-risk environments (p.93), such as fluctuating commodity markets. It reduces risk for suppliers by allowing cost adjustments based on actual expenses plus a margin. Option A is incorrect because low-risk projects favor fixed pricing. [P.93]
NEW QUESTION # 60
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