PMBOK Earned Value Management (EVM) 3

Question 1

A project has EAC of $620,000 and BAC of $580,000. What does this indicate?

Accepted Answer

The project is expected to finish $40,000 over budget

Answer

When EAC > BAC, the project is forecasted to exceed its original budget; VAC = BAC - EAC = -$40,000.

Question 2

Which EVM formula should a project manager use when the current cost variance is expected to continue throughout the project?

Accepted Answer

EAC = BAC / CPI

Answer

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

Question 3

In EVM, the term 'Planned Value' (PV) is also known as:

Accepted Answer

Budgeted Cost of Work Scheduled (BCWS)

Answer

PV was historically called BCWS (Budgeted Cost of Work Scheduled) in older EVM literature and represents the authorized budget for scheduled work.

Question 4

A TCPI of 1.15 based on EAC indicates:

Accepted Answer

The remaining work must be done 15% more efficiently than planned

Answer

TCPI > 1.0 means you need better-than-planned cost efficiency on remaining work to meet the target (EAC in this case).

Question 5

When would a project manager most likely report SPI as misleading near project completion?

Accepted Answer

SPI approaches 1.0 at project end regardless of actual schedule performance

Answer

As projects near completion, EV converges toward BAC and PV converges toward BAC, causing SPI to approach 1.0 even if the project is late.

PMBOK - Project Management Body of Knowledge Practice Test