PMBOK Earned Value Management (EVM) 4

Question 1

A project has BAC = $400,000, AC = $180,000, EV = $150,000, and PV = $200,000. What is the Cost Variance (CV)?

Accepted Answer

-$30,000

Answer

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?

Accepted Answer

Cost overrun, because CPI deviation is greater

Answer

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?

Accepted Answer

The project is exactly on budget

Answer

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:

Accepted Answer

The budgeted cost of work actually performed

Answer

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?

Accepted Answer

EAC = AC + [(BAC - EV) / (CPI × SPI)]

Answer

EAC = AC + [(BAC - EV) / (CPI × SPI)] is used when both cost and schedule performance are expected to influence the cost of remaining work.

PMBOK - Project Management Body of Knowledge Practice Test