Project Management Earned Value Management (EVM) Questions and Answers

Question 1

A project has a Budget at Completion (BAC) of $150,000. At the current status date, the project has an Earned Value (EV) of $60,000 and an Actual Cost (AC) of $75,000. The project manager determines that the current cost variances are atypical and expects the remaining work to be completed at the budgeted rate. Which formula should be used to calculate the Estimate at Completion (EAC)?

Accepted Answer

EAC = AC + (BAC - EV)

Answer

When current variances are considered atypical and not expected to continue, the EAC is calculated by taking the actual costs to date and adding the remaining budget. The formula EAC = AC + (BAC - EV) represents this scenario, as (BAC - EV) is the value of the remaining work.

Question 2

During a monthly project review, the project manager reports a Cost Performance Index (CPI) of 1.15 and a Schedule Performance Index (SPI) of 0.95. Which of the following statements provides the BEST interpretation of these metrics?

Accepted Answer

The project is under budget and behind schedule.

Answer

A CPI greater than 1.0 indicates the project is under budget (getting more value than what was spent). An SPI less than 1.0 indicates the project is behind schedule (completed less work than planned). Therefore, a CPI of 1.15 and an SPI of 0.95 means the project is performing favorably on cost but is delayed.

Question 3

A project is halfway through its planned duration. The following data is available: Budget at Completion (BAC) = $200,000; Planned Value (PV) = $100,000; Earned Value (EV) = $80,000; Actual Cost (AC) = $90,000. What is the Cost Variance (CV) for this project?

Accepted Answer

-$10,000

Answer

The formula for Cost Variance (CV) is EV - AC. Using the provided data: CV = $80,000 - $90,000 = -$10,000. A negative CV indicates that the project is over budget.

Question 4

The To-Complete Performance Index (TCPI) is a crucial EVM metric. What does a TCPI value of 1.2 indicate?

Accepted Answer

The remaining work must be completed with 20% greater cost efficiency to meet the budget.

Answer

TCPI represents the cost performance required for the remainder of the project to achieve a specific management goal (like the BAC or EAC). A TCPI greater than 1 means the required efficiency is higher than the current plan. A value of 1.2 means that for every dollar of remaining budget, $1.20 of value must be earned, which is a 20% increase in efficiency.

Question 5

A project manager is analyzing performance data. The Schedule Variance (SV) is calculated to be a positive value. What does this signify about the project's status?

Accepted Answer

The project has completed more work than was planned to be completed at this point.

Answer

Schedule Variance (SV) is calculated as Earned Value (EV) minus Planned Value (PV). A positive SV means that the value of the work performed (EV) is greater than the value of the work that was scheduled to be performed (PV), indicating the project is ahead of schedule.

Project Management Practice Test

Project Management Practice Test

Project Management Earned Value Management (EVM) Questions and Answers