PMBOK Earned Value Management (EVM) 2 — Questions and Answers
Question 1: A project has a BAC of $500,000, EV of $200,000, and AC of $250,000. What is the Cost Performance Index (CPI)?
- 0.80 (Correct answer)
- 1.25
- 0.40
- 1.00
Correct answer: 0.80
CPI = EV / AC = $200,000 / $250,000 = 0.80, meaning the project is getting $0.80 of value for every $1 spent.
Question 2: Which EVM metric best indicates whether a project will finish on time?
- Cost Variance (CV)
- Schedule Performance Index (SPI) (Correct answer)
- Budget at Completion (BAC)
- Estimate at Completion (EAC)
Correct answer: Schedule Performance Index (SPI)
SPI = EV / PV and measures schedule efficiency; an SPI below 1.0 indicates the project is behind schedule.
Question 3: The To-Complete Performance Index (TCPI) based on BAC is calculated as:
- (BAC - EV) / (BAC - AC) (Correct answer)
- (EV - AC) / BAC
- (BAC - AC) / EV
- EV / PV
Correct answer: (BAC - EV) / (BAC - AC)
TCPI (BAC) = (BAC - EV) / (BAC - AC), representing the cost efficiency needed on remaining work to meet the original budget.
Question 4: A project's SPI is 1.2 and CPI is 0.9. How should the project manager interpret this?
- Ahead of schedule and under budget
- Ahead of schedule but over budget (Correct answer)
- Behind schedule and under budget
- Behind schedule and over budget
Correct answer: Ahead of schedule but over budget
SPI > 1.0 means ahead of schedule; CPI < 1.0 means over budget — a combination requiring cost control attention.
Question 5: Estimate at Completion (EAC) using the formula EAC = AC + (BAC - EV) assumes:
- Future work will be performed at the current CPI
- The original estimate was flawed and a new estimate is needed
- The remaining work will be done at the budgeted rate (Correct answer)
- Future performance will match the SPI
Correct answer: The remaining work will be done at the budgeted rate
EAC = AC + (BAC - EV) assumes the remaining work will be completed exactly as originally planned (at budget).
Question 6: Which of the following represents Variance at Completion (VAC)?
- BAC - EAC (Correct answer)
- EV - AC
- PV - EV
- BAC - AC
Correct answer: BAC - EAC
VAC = BAC - EAC; a negative VAC indicates the project is expected to finish over budget.
Question 7: On a project with PV = $300,000, EV = $270,000, and AC = $260,000, what is the Schedule Variance (SV)?
- -$30,000 (Correct answer)
- $10,000
- $30,000
- -$10,000
Correct answer: -$30,000
SV = EV - PV = $270,000 - $300,000 = -$30,000, indicating the project is behind schedule by $30,000 in value.
PMBOK Earned Value Management (EVM) 2
A project has a BAC of $500,000, EV of $200,000, and AC of $250,000.
What is the Cost Performance Index (CPI)?