CAPM (Certified Associate in Project Management) Practice Exam

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What causes external failure costs?

  1. Purchasing new equipment

  2. Costs associated with defects found after the product reaches the customer

  3. Costs of acquiring a new company

  4. Costs associated with a new patent

The correct answer is: Costs associated with defects found after the product reaches the customer

External failure costs are costs incurred due to defects found after the product reaches the customer. These costs include warranty claims, product returns, customer support, and potentially damaging the reputation of the company. Purchasing new equipment, costs of acquiring a new company, and costs associated with a new patent are not directly related to external failure costs.

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