PMBOK Earned Value Management (EVM) Questions and Answers

Question 1

A project has a Planned Value (PV) of $100,000, an Earned Value (EV) of $90,000, and an Actual Cost (AC) of $110,000. What is the Cost Performance Index (CPI), and what does it indicate?

Accepted Answer

0.82, indicating the project is over budget.

Answer

The Cost Performance Index (CPI) is calculated as Earned Value (EV) divided by Actual Cost (AC). In this case, CPI = $90,000 / $110,000 = 0.818, or approximately 0.82. Since the CPI is less than 1.0, it signifies that for every dollar spent, the project is only earning $0.82 of planned value, indicating the project is over budget.

Question 2

A project status report indicates a Schedule Performance Index (SPI) of 1.2 and a Cost Performance Index (CPI) of 0.8. How should the project manager interpret these results?

Accepted Answer

The project is ahead of schedule and over budget.

Answer

An SPI greater than 1.0 (1.2 in this case) indicates that more work has been completed than was planned, so the project is ahead of schedule. A CPI less than 1.0 (0.8 in this case) indicates that the project is costing more than planned for the work completed, meaning it is over budget. Therefore, the project is ahead of schedule and over budget.

Question 3

A project manager determines that the original budget is no longer viable due to unforeseen circumstances and that future work will be performed at the budgeted rate. Which formula should be used to calculate the Estimate at Completion (EAC)?

Accepted Answer

EAC = AC + (BAC - EV)

Answer

When past performance is considered atypical and the project manager expects future work to be accomplished at the planned, budgeted rate, the Estimate at Completion (EAC) is calculated by adding the Actual Cost (AC) to date to the remaining budget. The remaining budget is the Budget at Completion (BAC) minus the Earned Value (EV). The formula is EAC = AC + (BAC - EV).

Question 4

In Earned Value Management, which of the following best describes Schedule Variance (SV)?

Accepted Answer

The difference between the earned value and the planned value.

Answer

Schedule Variance (SV) is a measure of schedule performance on a project. It is calculated using the formula SV = EV - PV (Earned Value minus Planned Value). A positive SV indicates the project is ahead of schedule, while a negative SV indicates it is behind schedule.

Question 5

A project is currently over budget. The project manager needs to determine the cost performance required for the remainder of the project to achieve the original Budget at Completion (BAC). Which metric should be calculated?

Accepted Answer

To-Complete Performance Index (TCPI)

Answer

The To-Complete Performance Index (TCPI) is the calculated cost performance index that must be achieved on the remaining work to meet a specified management goal, such as the original Budget at Completion (BAC). The formula based on the BAC is TCPI = (BAC - EV) / (BAC - AC). It answers the question, 'How efficiently must we use our remaining resources to meet the original budget?'

PMBOK - Project Management Body of Knowledge Practice Test

PMBOK - Project Management Body of Knowledge Practice Test

PMBOK Earned Value Management (EVM) Questions and Answers