CPP Earned Value Management 2 — Questions and Answers
Question 1: A project has a Budget at Completion (BAC) of $200,000 and is 40% complete at the scheduled midpoint. The actual cost so far is $95,000. What is the Cost Performance Index (CPI)?
- 0.84 (Correct answer)
- 0.95
- 1.05
- 1.19
Correct answer: 0.84
EV = 40% × $200,000 = $80,000; CPI = EV/AC = $80,000/$95,000 ≈ 0.84.
Question 2: Which EVM metric specifically measures how efficiently the project team is using the time allocated?
- CPI
- SPI (Correct answer)
- TCPI
- VAC
Correct answer: SPI
Schedule Performance Index (SPI) = EV/PV and measures schedule efficiency.
Question 3: A project's Estimate at Completion (EAC) calculated as BAC/CPI is best used when:
- Future work will be performed at the budgeted rate
- Past cost performance is expected to continue (Correct answer)
- The original estimate is fundamentally flawed
- The remaining work scope has changed significantly
Correct answer: Past cost performance is expected to continue
EAC = BAC/CPI assumes the current CPI will persist for all remaining work.
Question 4: If a project's SPI is 0.90 and its CPI is 1.10, which statement best describes the project status?
- Behind schedule and over budget
- Ahead of schedule and under budget
- Behind schedule but under budget (Correct answer)
- Ahead of schedule but over budget
Correct answer: Behind schedule but under budget
SPI < 1 indicates behind schedule; CPI > 1 indicates under budget (cost efficient).
Question 5: The Variance at Completion (VAC) formula is:
- BAC − EAC (Correct answer)
- EAC − BAC
- BAC − EV
- EV − AC
Correct answer: BAC − EAC
VAC = BAC − EAC; a negative VAC indicates a projected cost overrun.
Question 6: Which term describes the authorized budget assigned to scheduled work?
- Earned Value (EV)
- Planned Value (PV) (Correct answer)
- Actual Cost (AC)
- Budget at Completion (BAC)
Correct answer: Planned Value (PV)
Planned Value (PV), also called BCWS, is the authorized budget for work scheduled by a given date.
Question 7: A project manager recalculates EAC as AC + (BAC − EV). This formula assumes:
- Past variances will continue at the same rate
- The remaining work will be completed at budgeted rates (Correct answer)
- Future performance will match the current CPI
- The project is unrecoverable and needs rescoping
Correct answer: The remaining work will be completed at budgeted rates
EAC = AC + (BAC − EV) assumes the remaining work proceeds exactly as originally planned.
CPP Earned Value Management 2
A project has a Budget at Completion (BAC) of $200,000 and is 40% complete at the scheduled midpoint.
The actual cost so far is $95,000.
What is the Cost Performance Index (CPI)?