CAPM Earned Value Management 4 — Questions and Answers
Question 1: A project manager is told the project has CPI = 0.75 and SPI = 0.85. Which statement best describes the project status?
- Over budget and ahead of schedule
- Under budget and behind schedule
- Over budget and behind schedule (Correct answer)
- Under budget and ahead of schedule
Correct answer: Over budget and behind schedule
CPI < 1.0 means over budget; SPI < 1.0 means behind schedule — both metrics indicate unfavorable performance.
Question 2: Which technique assigns EV credit only when a work package is 100% complete?
- Weighted milestones
- Fixed formula (50/50)
- 0/100 method (Correct answer)
- Level of effort
Correct answer: 0/100 method
The 0/100 method gives no earned value credit until the work package is fully completed.
Question 3: The 50/50 earned value measurement method credits how much EV at the start of a work package?
- 0%
- 25%
- 50% (Correct answer)
- 100%
Correct answer: 50%
The 50/50 rule gives 50% EV credit when the work package begins and the remaining 50% when it is completed.
Question 4: Which EVM component is sometimes called 'Budgeted Cost of Work Scheduled' (BCWS)?
- Earned Value (EV)
- Actual Cost (AC)
- Planned Value (PV) (Correct answer)
- Budget at Completion (BAC)
Correct answer: Planned Value (PV)
PV was historically called BCWS — it represents the authorized budget for scheduled work up to a given point.
Question 5: A project's EAC is $120,000 and its BAC is $100,000. What is the VAC?
- +$20,000
- −$20,000 (Correct answer)
- +$10,000
- −$10,000
Correct answer: −$20,000
VAC = BAC − EAC = $100,000 − $120,000 = −$20,000, indicating a projected cost overrun of $20,000.
Question 6: Which of the following is NOT a valid method for estimating EAC?
- AC + Bottom-up ETC
- BAC / CPI
- AC + (BAC − EV)
- EV × SPI (Correct answer)
Correct answer: EV × SPI
Multiplying EV by SPI does not produce a valid EAC formula; the three standard approaches all start from AC.
Question 7: During a project status meeting, the project manager reports EV = $50,000 and AC = $50,000. What can be concluded?
- The project is ahead of schedule
- The project is behind schedule
- The project is exactly on budget (Correct answer)
- The project will finish under budget
Correct answer: The project is exactly on budget
CV = EV − AC = $0 means the value earned exactly equals the money spent — the project is on budget at this point.
CAPM Earned Value Management 4
A project manager is told the project has CPI = 0.75 and SPI = 0.85.
Which statement best describes the project status?