EVM EVM Forecasting and Completion Estimates 3

Question 1

Budget at Completion (BAC) represents:

Accepted Answer

The total authorized budget for the entire scope of work

Answer

BAC is the sum of all budgets allocated for the total scope of the project and serves as the baseline for performance measurement.

Question 2

If a project has BAC = $1,000,000 and the final EAC = $1,200,000, what is the VAC?

Accepted Answer

-$200,000

Answer

VAC = BAC - EAC = $1,000,000 - $1,200,000 = -$200,000, indicating a projected $200,000 cost overrun.

Question 3

The IEAC (Independent Estimate at Completion) differs from project EAC because it is:

Accepted Answer

Calculated by an independent party or method outside the project team

Answer

IEAC is an externally calculated forecast used to cross-check the project's own EAC and detect optimism bias in the internal estimate.

Question 4

Which relationship is always mathematically true in EVM?

Accepted Answer

EAC = AC + ETC

Answer

EAC = AC + ETC is a fundamental EVM identity: total forecast equals what has already been spent plus what remains to be spent.

Question 5

At what approximate project completion percentage does the CPI typically become a reliable final cost predictor?

Accepted Answer

20%

Answer

Research by Christensen and others shows CPI stabilizes and becomes a reliable final cost predictor at approximately 20% project completion.

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