EVM Certification Forecasting & Estimates at Completion 2 — Questions and Answers
Question 1: What is the TCPI formula when using the original BAC as the cost target?
- TCPI = (BAC - EV) / (BAC - AC) (Correct answer)
- TCPI = (BAC - AC) / (BAC - EV)
- TCPI = (EAC - EV) / (EAC - AC)
- TCPI = EV / BAC
Correct answer: TCPI = (BAC - EV) / (BAC - AC)
TCPI (BAC) = (BAC - EV) / (BAC - AC): work remaining divided by funds remaining against the original budget.
Question 2: What is the TCPI formula when using the contractor's current EAC as the cost target?
- TCPI = (BAC - EV) / (BAC - AC)
- TCPI = (BAC - EV) / (EAC - AC) (Correct answer)
- TCPI = EV / AC
- TCPI = (EAC - AC) / (BAC - EV)
Correct answer: TCPI = (BAC - EV) / (EAC - AC)
TCPI (EAC) = (BAC - EV) / (EAC - AC): replaces BAC with EAC in the denominator to measure efficiency needed against the revised estimate.
Question 3: An Independent Estimate at Completion (IEAC) is typically prepared by which party?
- The project manager using internal performance data
- The cost control team during monthly reporting
- An external or government/customer organization (Correct answer)
- The scheduling team during an IBR
Correct answer: An external or government/customer organization
IEAC is prepared by an independent party — typically the customer or government — to validate or challenge the contractor's EAC from an outside perspective.
Question 4: If TCPI based on BAC = 1.25 while current CPI = 0.80, what does this gap indicate?
- The project can still meet BAC with its current performance level
- Completing within BAC is highly unlikely without a significant efficiency improvement (Correct answer)
- The team needs only a slight adjustment to hit the budget target
- The schedule will recover automatically as CPI improves
Correct answer: Completing within BAC is highly unlikely without a significant efficiency improvement
The team would need to perform roughly 56% more efficiently than the current CPI to reach BAC, making recovery within original budget highly unrealistic.
Question 5: Which EAC formula is most appropriate when both cost and schedule variances are significant and both efficiencies must be considered?
- EAC = BAC / CPI
- EAC = AC + (BAC - EV)
- EAC = AC + (BAC - EV) / CPI
- EAC = AC + (BAC - EV) / (CPI x SPI) (Correct answer)
Correct answer: EAC = AC + (BAC - EV) / (CPI x SPI)
The composite CPI × SPI formula accounts for both cost and schedule inefficiencies, providing a more realistic forecast when both indices are significantly below 1.0.
Question 6: A project has BAC = $500,000 and EAC = $575,000. What is the VAC, and what does it mean?
- +$75,000, meaning the project will finish under budget
- -$75,000, meaning the project is forecasted to overrun by $75,000 (Correct answer)
- $575,000, representing the revised total forecast
- -$500,000, representing the total budget consumed
Correct answer: -$75,000, meaning the project is forecasted to overrun by $75,000
VAC = BAC - EAC = $500,000 - $575,000 = -$75,000; the negative value signals a projected cost overrun of $75,000 at completion.
Question 7: Under ANSI/EIA-748 standards, which statement about EAC is correct?
- EAC must always equal BAC at project initiation
- EAC is only updated at project completion
- EAC represents the contractor's current best estimate of total cost, updated regularly (Correct answer)
- EAC cannot exceed BAC without formal customer approval
Correct answer: EAC represents the contractor's current best estimate of total cost, updated regularly
Under ANSI/EIA-748, EAC is the contractor's current best estimate of total program cost, updated throughout the project to reflect actual performance and re-estimates.
EVM Certification Forecasting & Estimates at Completion 2
What is the TCPI formula when using the original BAC as the cost target?