AACE CCP cheat sheet

AACE estimate classes range from Class 5 (least defined, about 0–2% project definition) to Class 1 (most defined, about 65–100%); expected accuracy generally narrows as the class number decreases.

Class 3 estimates commonly correspond to about 10–40% project definition, with expected accuracy often around -10% to -20% on the low side and +10% to +30% on the high side.

A total estimate typically combines direct costs, indirect costs, contingency, escalation, and owner or other project costs as defined in the estimate basis.

Contingency covers known-unknowns within approved scope; escalation covers anticipated price changes over time; management reserve covers unknown-unknowns outside the baseline.

PERT expected duration = (O + 4M + P) / 6; standard deviation = (P - O) / 6; variance = [(P - O) / 6]^2.

Learning curve: Y = aX^b, where b = ln(learning rate) / ln 2; an 80% learning curve gives b approximately -0.322.

Cost-capacity scaling: C2 = C1 × (Q2 / Q1)^n, where n is usually less than 1 for economy of scale.

Compound escalation: future value = present value × (1 + escalation rate)^n; nominal cash flows must be discounted with nominal rates and real cash flows with real rates.

The estimate basis documents scope, assumptions, exclusions, pricing basis, productivity assumptions, reference data, and expected accuracy.

The critical path is the longest continuous path through the schedule network; its length determines the shortest possible project duration, and its activities have zero total float absent constraints.

Total float = late start - early start = late finish - early finish; free float = minimum early start of successors - early finish of the activity.

The forward pass calculates early start and early finish; the backward pass calculates late start and late finish; float is derived from the difference between the passes.

Precedence diagramming method relationships are finish-to-start, start-to-start, finish-to-finish, and start-to-finish; lags add delay and leads create overlap.

Crashing compresses critical activities; cost slope = (crash cost - normal cost) / (normal duration - crash duration), and the lowest-cost slopes are selected first.

Resource leveling may extend project duration to resolve over-allocation; resource smoothing seeks to keep duration and uses available float to reduce demand peaks.

The WBS 100% rule requires child elements to sum to the parent scope, with work elements mutually exclusive to avoid double counting.

The schedule baseline is the approved schedule used for performance comparison; changing it requires formal integrated change control.

Bar charts display timing and progress but not logic; network diagrams display dependencies, paths, and float.

Planned value (PV) is budgeted cost of work scheduled (BCWS); earned value (EV) is budgeted cost of work performed (BCWP); actual cost (AC) is actual cost of work performed (ACWP).

Cost variance CV = EV - AC; schedule variance SV = EV - PV; negative CV indicates over budget, and negative SV indicates behind schedule in earned-value terms.

Cost performance index CPI = EV / AC; schedule performance index SPI = EV / PV; values above 1.0 are favorable and values below 1.0 are unfavorable.

Estimate at completion EAC = AC + (BAC - EV) / CPI; estimate to complete ETC = EAC - AC; variance at completion VAC = BAC - EAC.

To-complete performance index TCPI = (BAC - EV) / (BAC - AC) when targeting the budget; use (EAC - EV) / (EAC - AC) when targeting a revised estimate.

Percent complete = EV / BAC; percent spent = AC / BAC; these are not equivalent, and a high percent spent with low percent complete signals cost pressure.

Earned schedule converts EV to the planned duration or date of corresponding work: SPI(t) = ES / actual time; IEAC(t) = planned duration / SPI(t).

A composite forecast such as EAC = AC + (BAC - EV) / (CPI × SPI) is used when remaining work is expected to be affected by both cost and schedule performance.

Variance analysis compares actuals with the baseline and evaluates thresholds and trends rather than relying on a single reporting-period snapshot.

A project is temporary and produces a unique product, service, or result; operations are ongoing and repetitive.

The triple constraint links scope, time, and cost, often with quality; changing one generally requires trade-off analysis and adjustment of at least one other.

A typical project life cycle includes initiating, planning, executing, monitoring and controlling, and closing; phase gates authorize progression to the next phase.

Expected monetary value EMV = probability × impact; risk response strategies include avoid, mitigate, transfer, accept, exploit, enhance, and share.

The number of communication channels among n stakeholders is n(n - 1) / 2; adding stakeholders increases communication complexity rapidly.

Organization structures range from functional, with low project manager authority, through weak, balanced, and strong matrices, to projectized, with high project manager authority.

A RACI matrix assigns Responsible, Accountable, Consulted, and Informed roles; each activity should have one accountable owner.

Integrated change control reviews, approves or rejects, and documents changes after assessing impacts on scope, schedule, cost, quality, and risk baselines.

Contract type allocates cost risk: fixed-price places more cost risk on the seller; cost-reimbursable places more on the buyer; time and materials blends both.

Future value F = P(1 + i)^n; present value P = F / (1 + i)^n, where i is the periodic discount or interest rate and n is the number of periods.

Net present value NPV = sum of future cash flows discounted at the required rate minus initial investment; an independent project is acceptable if NPV is greater than zero.

Internal rate of return is the discount rate at which NPV equals zero; a project is generally acceptable if IRR meets or exceeds the hurdle rate, though alternating cash flow signs can create multiple IRRs.

Payback period is the time required to recover the initial investment; discounted payback uses discounted cash flows and accounts for the time value of money.

Benefit-cost ratio BCR = present value of benefits / present value of costs; a BCR greater than 1.0 indicates discounted benefits exceed discounted costs.

Break-even quantity = fixed costs / (unit price - variable cost per unit); at that volume total revenue equals total cost and profit is zero.

Straight-line depreciation = (asset cost - salvage value) / useful life; MACRS uses statutory accelerated percentages rather than a uniform annual charge.

Sunk costs are excluded from incremental economic analysis; opportunity cost represents the value of the best alternative forgone and is included.

Nominal cash flows are discounted using nominal rates, while real cash flows are discounted using real rates; mixing them distorts NPV.