ADM Budgeting & Financial Management 2

Question 1

What is the primary purpose of establishing a minimum viable budget (MVB) for an agile initiative?

Accepted Answer

To fund the smallest experiment that can validate a business hypothesis

Answer

To eliminate all discretionary spending from the project

Answer

To ensure the team operates with no financial risk

Answer

To satisfy auditors by documenting the lowest possible estimate

Question 2

In SAFe, which financial construct replaces traditional project-based budgeting at the portfolio level?

Accepted Answer

Value stream budgeting with guardrails

Answer

Program increment budget

Answer

Epic-level cost estimate

Answer

Sprint budget allocation model

Question 3

An Agile Delivery Manager presents a business case using NPV analysis. Which assumption is most critical to validate first?

Accepted Answer

The discount rate and timing of expected cash flows

Answer

The number of sprints required

Answer

The team's historical velocity

Answer

The number of stakeholders involved in the project

Question 4

What is the key advantage of time-boxing in agile from a financial management perspective?

Accepted Answer

It creates a natural financial checkpoint that limits uncontrolled spending

Answer

It guarantees the team will complete all planned work

Answer

It eliminates the need for budget approval from stakeholders

Answer

It automatically reduces the cost of each feature delivered

Question 5

Which practice helps an Agile Delivery Manager maintain financial transparency with business stakeholders throughout delivery?

Accepted Answer

Publishing burn-up charts and forecasts at sprint reviews

Answer

Limiting financial data to the executive sponsor only

Answer

Providing a single end-of-project financial report

Answer

Delegating all financial reporting to the PMO

Question 6

What does a 'budget guardrail' in lean portfolio management define?

Accepted Answer

Upper and lower spending boundaries for a value stream without needing re-approval

Answer

The maximum number of features allowed in a program increment

Answer

The minimum team size required to start a new initiative

Answer

A contractual penalty clause for budget overruns

Question 7

When comparing agile and waterfall from a financial risk perspective, which statement is most accurate?

Accepted Answer

Agile reduces financial risk by delivering value incrementally and enabling early course correction

Answer

Waterfall has lower financial risk because all costs are defined upfront

Answer

Both approaches carry identical financial risk profiles

Answer

Agile increases financial risk because budgets are never fixed