PMI-SP Earned Value 2 — Questions and Answers
Question 1: A project has a BAC of $200,000, EV of $80,000, and AC of $100,000. What is the Cost Performance Index (CPI)?
- 0.80 (Correct answer)
- 1.25
- 0.40
- 1.80
Correct answer: 0.80
CPI = EV / AC = $80,000 / $100,000 = 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 schedule based on the work completed so far?
- SV (Schedule Variance)
- SPI (Schedule Performance Index) (Correct answer)
- CV (Cost Variance)
- EAC (Estimate at Completion)
Correct answer: SPI (Schedule Performance Index)
SPI = EV / PV and represents the efficiency of time utilization; an SPI below 1.0 indicates work is progressing slower than planned.
Question 3: A project manager calculates ETC using a formula that assumes future work will be performed at the budgeted rate. Which ETC formula does this represent?
- ETC = EAC - AC
- ETC = (BAC - EV) / CPI
- ETC = BAC - EV (Correct answer)
- ETC = (BAC - EV) / SPI
Correct answer: ETC = BAC - EV
ETC = BAC - EV assumes remaining work will be completed at the planned (budgeted) rate, ignoring past performance.
Question 4: A project's PV is $150,000, EV is $120,000, and AC is $110,000. What does the negative SV indicate?
- The project is over budget
- The project is behind schedule (Correct answer)
- The project is ahead of schedule
- The project has a favorable cost variance
Correct answer: The project is behind schedule
SV = EV - PV = $120,000 - $150,000 = -$30,000, a negative value means less work was accomplished than planned, indicating a schedule delay.
Question 5: What does a TCPI value greater than 1.0 indicate?
- The project has been performing more efficiently than required
- Future work must be completed more efficiently than originally planned (Correct answer)
- The project is under budget
- The cost performance index is favorable
Correct answer: Future work must be completed more efficiently than originally planned
TCPI > 1.0 means the project must achieve greater cost efficiency in remaining work than was originally planned to meet the target.
Question 6: On a project with BAC = $500,000, AC = $300,000, and EV = $250,000, what is the Estimate at Completion (EAC) assuming past CPI will continue?
- $550,000
- $600,000 (Correct answer)
- $650,000
- $575,000
Correct answer: $600,000
EAC = BAC / CPI; CPI = 250,000/300,000 = 0.833; EAC = 500,000 / 0.833 = $600,000.
Question 7: Which of the following best describes the Variance at Completion (VAC)?
- The difference between planned and actual start dates
- The difference between BAC and EAC (Correct answer)
- The amount of remaining work to be completed
- The ratio of earned value to planned value
Correct answer: The difference between BAC and EAC
VAC = BAC - EAC and represents the projected surplus or deficit in the budget at the end of the project.
PMI-SP Earned Value 2
A project has a BAC of $200,000, EV of $80,000, and AC of $100,000.
What is the Cost Performance Index (CPI)?