PMBOK Earned Value Management (EVM) 4 — Questions and Answers
Question 1: A project has BAC = $400,000, AC = $180,000, EV = $150,000, and PV = $200,000. What is the Cost Variance (CV)?
- -$30,000 (Correct answer)
- $30,000
- -$50,000
- $20,000
Correct answer: -$30,000
CV = EV - AC = $150,000 - $180,000 = -$30,000, indicating the project is over budget by $30,000.
Question 2: An earned value report shows CPI = 0.75 and SPI = 0.85. Which concern should the project manager address first?
- Cost overrun, because CPI deviation is greater (Correct answer)
- Schedule slippage, because SPI is closer to 1.0
- Neither; both are within acceptable range
- Resource constraints causing both metrics to suffer
Correct answer: Cost overrun, because CPI deviation is greater
CPI of 0.75 represents a 25% cost overrun, which is a larger deviation than SPI of 0.85 (15% schedule slippage), making cost the priority concern.
Question 3: What does a Cost Performance Index (CPI) of exactly 1.0 mean?
- The project is exactly on budget (Correct answer)
- The project is exactly on schedule
- The project will finish on time
- The project has spent its full budget
Correct answer: The project is exactly on budget
CPI = 1.0 means EV equals AC — the project is earning exactly $1.00 of value for every $1.00 spent, i.e., on budget.
Question 4: In EVM, 'Earned Value' is best described as:
- The budgeted cost of work actually performed (Correct answer)
- The actual cost incurred for work completed
- The planned budget for work scheduled to date
- The forecast cost at project completion
Correct answer: The budgeted cost of work actually performed
EV (Earned Value) = BCWP = the portion of the approved budget allocated to the work that has actually been completed.
Question 5: A project manager wants to forecast completion cost assuming both CPI and SPI will influence remaining work. Which EAC formula applies?
- EAC = BAC / CPI
- EAC = AC + [(BAC - EV) / (CPI × SPI)] (Correct answer)
- EAC = AC + (BAC - EV)
- EAC = EV / PV × BAC
Correct answer: EAC = AC + [(BAC - EV) / (CPI × SPI)]
EAC = AC + [(BAC - EV) / (CPI × SPI)] is used when both cost and schedule performance are expected to influence the cost of remaining work.
Question 6: Which document formally establishes the performance measurement baseline (PMB) used in EVM?
- The integrated project plan with approved scope, schedule, and cost baselines (Correct answer)
- The project charter
- The risk register
- The work breakdown structure dictionary alone
Correct answer: The integrated project plan with approved scope, schedule, and cost baselines
The PMB is the time-phased integration of the approved scope, schedule, and cost baselines that EVM measures actual performance against.
Question 7: A project's SPI was 0.7 for the first half but is now 0.95. What is the most likely explanation?
- The project team accelerated work to recover the schedule (Correct answer)
- The budget was increased to offset the schedule slippage
- The scope was reduced, making remaining work easier
- The CPI improved, which automatically raised the SPI
Correct answer: The project team accelerated work to recover the schedule
An improving SPI typically means the team has increased productivity or added resources to recover lost schedule ground.
PMBOK Earned Value Management (EVM) 4
A project has BAC = $400,000, AC = $180,000, EV = $150,000, and PV = $200,000.
What is the Cost Variance (CV)?