CAPM Earned Value Management 5 — Questions and Answers
Question 1: A Control Account in EVM is best described as:
- A bank account used to track project expenses
- A management control point where scope, budget, and schedule are integrated and performance is measured (Correct answer)
- The total project contingency reserve
- A change control log for budget adjustments
Correct answer: A management control point where scope, budget, and schedule are integrated and performance is measured
Control accounts are management points within the WBS where scope, budget, and schedule are integrated for EVM performance measurement.
Question 2: If a project's TCPI (based on BAC) is 1.15, what does this mean for the project team?
- The remaining work must be completed at 115% efficiency to meet the original budget (Correct answer)
- The project is currently 15% over budget
- The project will finish 15% early
- The project has 15% cost reserve remaining
Correct answer: The remaining work must be completed at 115% efficiency to meet the original budget
TCPI of 1.15 means the team must perform 15% more efficiently on remaining work than originally planned to achieve the BAC.
Question 3: Which EVM formula provides the EAC when both CPI and SPI are expected to influence future performance?
- EAC = BAC / CPI
- EAC = AC + (BAC − EV)
- EAC = AC + (BAC − EV) / (CPI × SPI) (Correct answer)
- EAC = EV + ETC
Correct answer: EAC = AC + (BAC − EV) / (CPI × SPI)
EAC = AC + (BAC − EV) / (CPI × SPI) accounts for both cost and schedule efficiency in forecasting total project cost.
Question 4: The 'Level of Effort' (LOE) earned value measurement technique is typically used for:
- Short discrete tasks with clear deliverables
- Support and management activities that lack discrete measurable outputs (Correct answer)
- Work packages with fixed milestones
- Risk response activities
Correct answer: Support and management activities that lack discrete measurable outputs
LOE is used for ongoing support activities (like project management or administrative support) where progress cannot be discretely measured.
Question 5: A project's Actual Cost (AC) is $90,000, EV is $85,000, and BAC is $120,000. Using EAC = AC + (BAC − EV), what is the EAC?
- $115,000
- $120,000
- $125,000 (Correct answer)
- $141,176
Correct answer: $125,000
EAC = AC + (BAC − EV) = $90,000 + ($120,000 − $85,000) = $90,000 + $35,000 = $125,000.
Question 6: Which statement correctly describes the relationship between EAC and ETC?
- EAC = ETC − AC
- ETC = EAC − AC (Correct answer)
- EAC = ETC + BAC
- ETC = BAC − EAC
Correct answer: ETC = EAC − AC
ETC = EAC − AC; the Estimate to Complete equals the total forecasted cost minus what has already been spent.
Question 7: In EVM, 'Management Reserve' differs from 'Contingency Reserve' in that management reserve:
- Is included in the Performance Measurement Baseline
- Is controlled by the project manager for known risks
- Is held by senior management for unknown unknowns and is not part of the PMB (Correct answer)
- Is calculated as a percentage of each work package
Correct answer: Is held by senior management for unknown unknowns and is not part of the PMB
Management reserve is controlled by senior management for unforeseen work (unknown unknowns) and is excluded from the PMB.
CAPM Earned Value Management 5
A Control Account in EVM is best described as: