Financial Management for Project Managers Earned Value Management 2

Question 1

The Estimate at Completion (EAC) using the most common EVM formula (assuming past CPI continues) is:

Accepted Answer

BAC / CPI

Answer

EAC = BAC / CPI assumes the cost efficiency experienced so far will continue for the remaining work, projecting the final total cost of the project.

Question 2

Estimate to Complete (ETC) represents:

Accepted Answer

The expected cost to finish the remaining project work

Answer

ETC is the projected cost of completing the remaining scope of work, calculated as EAC - AC.

Question 3

Variance at Completion (VAC) is defined as:

Accepted Answer

BAC - EAC

Answer

VAC = BAC - EAC; a positive VAC indicates the project is expected to finish under budget, while a negative VAC signals an expected overrun.

Question 4

A project has BAC = $100,000, EV = $40,000, and AC = $50,000. What is the Cost Performance Index (CPI)?

Accepted Answer

0.80

Answer

CPI = EV / AC = $40,000 / $50,000 = 0.80, meaning the project is getting only $0.80 of value for every dollar spent.

Question 5

Planned Value (PV) in EVM represents:

Accepted Answer

The budgeted cost of work scheduled to be done by a specific point in time

Answer

PV (also called BCWS — Budgeted Cost of Work Scheduled) is the authorized budget for the work planned to be completed at any given point in the project schedule.

Financial Management for Project Managers Practice Test

Financial Management for Project Managers Practice Test

Financial Management for Project Managers Earned Value Management 2