Financial Management for Project Managers Performance Measurement in Accounting 2

Question 1

A project has a Budget at Completion (BAC) of $500,000, Earned Value (EV) of $200,000, and Actual Cost (AC) of $250,000. What is the Cost Performance Index (CPI)?

Accepted Answer

0.80

Answer

CPI = EV / AC = $200,000 / $250,000 = 0.80, indicating the project is over budget.

Question 2

Which performance measurement baseline integrates scope, schedule, and cost to provide a unified project control baseline?

Accepted Answer

Performance Measurement Baseline (PMB)

Answer

The Performance Measurement Baseline (PMB) integrates scope, schedule, and cost for unified project control.

Question 3

A project's Schedule Performance Index (SPI) is 1.15. What does this indicate?

Accepted Answer

The project is ahead of schedule

Answer

An SPI greater than 1.0 means EV exceeds PV, indicating the project is progressing faster than planned.

Question 4

In Earned Value Management, what does Planned Value (PV) represent?

Accepted Answer

The authorized budget assigned to scheduled work

Answer

Planned Value (PV) is the authorized budget assigned to the work scheduled to be completed by a given point in time.

Question 5

A project manager uses the formula EAC = BAC / CPI to calculate the Estimate at Completion. When is this formula most appropriate?

Accepted Answer

When current variances are expected to continue throughout the project

Answer

EAC = BAC / CPI is used when current cost performance trends are expected to persist for the remainder of the project.

Financial Management for Project Managers Practice Test

Financial Management for Project Managers Practice Test

Financial Management for Project Managers Performance Measurement in Accounting 2