Earned Value Management Flashcards
6 cards from real Financial Management for Project Managers practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Earned Value Management flashcards as text
The Estimate at Completion (EAC) using the most common EVM formula (assuming past CPI continues) is:
Answer: BAC / CPI
EAC = BAC / CPI assumes the cost efficiency experienced so far will continue for the remaining work, projecting the final total cost of the project.
Estimate to Complete (ETC) represents:
Answer: The expected cost to finish the remaining project work
ETC is the projected cost of completing the remaining scope of work, calculated as EAC - AC.
Variance at Completion (VAC) is defined as:
Answer: BAC - EAC
VAC = BAC - EAC; a positive VAC indicates the project is expected to finish under budget, while a negative VAC signals an expected overrun.
A project has BAC = $100,000, EV = $40,000, and AC = $50,000. What is the Cost Performance Index (CPI)?
Answer: 0.80
CPI = EV / AC = $40,000 / $50,000 = 0.80, meaning the project is getting only $0.80 of value for every dollar spent.
Planned Value (PV) in EVM represents:
Answer: The budgeted cost of work scheduled to be done by a specific point in time
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.
To-Complete Performance Index (TCPI) based on BAC measures:
Answer: The cost efficiency required on all remaining work to meet the original budget
TCPI = (BAC - EV) / (BAC - AC); it tells managers what CPI must be achieved on remaining work to hit the original BAC.