PMI-SP Earned Value 5 — Questions and Answers
Question 1: Which EVM parameter represents the authorized budget assigned to scheduled work that must be accomplished?
- Actual Cost (AC)
- Earned Value (EV)
- Planned Value (PV) (Correct answer)
- Budget at Completion (BAC)
Correct answer: Planned Value (PV)
Planned Value (PV) is the authorized budget allocated to the scheduled work to be accomplished by a specific point in time.
Question 2: A project team is 60% complete on a $50,000 activity using the percent complete method. What EV is reported?
- $20,000
- $25,000
- $30,000 (Correct answer)
- $35,000
Correct answer: $30,000
EV = % complete × BAC = 0.60 × $50,000 = $30,000 using the percent complete earned value method.
Question 3: When is the Estimate to Complete (ETC) formula ETC = (BAC - EV) / CPI most appropriate?
- When the project team expects to recover all past inefficiencies
- When past cost performance is expected to continue through project completion (Correct answer)
- When a new independent estimate has been completed
- When the project is ahead of schedule
Correct answer: When past cost performance is expected to continue through project completion
This ETC formula is appropriate when past CPI is a reliable predictor of future performance and inefficiencies are likely to persist.
Question 4: An Integrated Master Schedule (IMS) uses EVM. Which element links the schedule to the performance measurement baseline?
- Work Breakdown Structure (WBS)
- Control Accounts (Correct answer)
- Risk Register
- Resource Histogram
Correct answer: Control Accounts
Control accounts are the management control points where scope, schedule, and budget are integrated and EVM performance is measured.
Question 5: A project's SPI is 0.85 at month 6. The project manager knows SPI tends to converge toward 1.0 near project end. What risk does this create for EVM forecasting?
- SPI-based schedules become more accurate near project end
- SPI may mask persistent schedule problems as the denominator (PV) grows toward BAC (Correct answer)
- The cost variance will disappear
- EAC calculations become unnecessary
Correct answer: SPI may mask persistent schedule problems as the denominator (PV) grows toward BAC
Near project completion, all remaining PV is accumulated so SPI naturally trends toward 1.0, potentially obscuring real schedule delays.
Question 6: Which of the following metrics best forecasts the total project cost at completion, assuming current CPI remains constant?
- ETC = BAC - EV
- EAC = BAC / CPI (Correct answer)
- VAC = BAC - EAC
- TCPI = (BAC - EV) / (BAC - AC)
Correct answer: EAC = BAC / CPI
EAC = BAC / CPI is the most common forecast formula when current cost performance efficiency is expected to continue.
Question 7: A project with BAC = $400,000 has a CPI of 1.10 and an SPI of 0.95 at the midpoint. Using the composite EAC formula, which statement is true?
- The project will finish under budget and on schedule
- Cost performance helps offset the schedule slippage in the composite EAC forecast (Correct answer)
- The project will overrun its budget
- SPI has no effect on EAC calculations
Correct answer: Cost performance helps offset the schedule slippage in the composite EAC forecast
In the composite EAC = AC + [(BAC - EV) / (CPI × SPI)], the CPI > 1 partially offsets the SPI < 1, resulting in a better forecast than SPI alone would suggest.
PMI-SP Earned Value 5
Which EVM parameter represents the authorized budget assigned to scheduled work that must be accomplished?