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AACE EVP practice questions

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Question 1Earned Value Management Fundamentals

Which three data points form the foundation of every earned value calculation?

  1. Planned Value, Earned Value, and Actual Cost Correct answer.
  2. Cost Baseline, Funding Requirement, and Cash Flow
  3. Budget at Completion, Contingency Reserve, and Management Reserve
  4. Work Package, Control Account, and Cost Account

Explanation

Earned value analysis rests on three core measures: Planned Value (budgeted cost of work scheduled), Earned Value (budgeted cost of work performed), and Actual Cost (cost actually incurred). All variances and performance indices are derived from combinations of these three values.

Question 2Earned Value Management Fundamentals

A project has a Budget at Completion of $500,000 and has completed work worth $200,000 against a plan of $250,000. What is the Schedule Variance?

  1. -$50,000 Correct answer.
  2. $50,000 favorable
  3. $200,000
  4. -$250,000

Explanation

Schedule Variance equals Earned Value minus Planned Value ($200,000 - $250,000 = -$50,000). A negative result indicates the project is behind schedule in value terms.

Question 3Earned Value Management Fundamentals

What does a Cost Performance Index of exactly 1.0 indicate?

  1. The project has used its entire budget.
  2. Costs are being incurred faster than planned.
  3. Work performed is costing exactly what was budgeted for it. Correct answer.
  4. The project is ahead of schedule.

Explanation

CPI equals Earned Value divided by Actual Cost. A value of 1.0 means every dollar spent has produced exactly one dollar of budgeted value, so cost performance matches the baseline.

Question 4Earned Value Management Fundamentals

Which term describes the authorized budget assigned to scheduled work?

  1. Actual Cost
  2. Planned Value Correct answer.
  3. Estimate to Complete
  4. Earned Value

Explanation

Planned Value is the budget authorized for the work scheduled to be accomplished by a given point in time. It establishes the performance measurement baseline against which progress is compared.

Question 5Earned Value Management Fundamentals

A project reports Earned Value of $80,000 and Actual Cost of $100,000. What is the Cost Variance?

  1. $80,000
  2. $20,000
  3. -$20,000 Correct answer.
  4. -$180,000

Explanation

Cost Variance equals Earned Value minus Actual Cost ($80,000 - $100,000 = -$20,000). A negative value means the project has spent more than the value earned.

Question 6Earned Value Management Fundamentals

What is the primary purpose of earned value management?

  1. To replace the project schedule with financial reporting
  2. To assign resources to work packages
  3. To calculate the final contract price
  4. To integrate scope, schedule, and cost performance into a single measurement system Correct answer.

Explanation

Earned value management integrates scope, schedule, and cost data so that physical progress can be objectively measured against the performance measurement baseline. It is a performance measurement system, not a pricing or resourcing tool.

Question 7Earned Value Management Fundamentals

Which index is calculated as Earned Value divided by Planned Value?

  1. Schedule Performance Index Correct answer.
  2. Cost Performance Index
  3. Variance at Completion
  4. To-Complete Performance Index

Explanation

The Schedule Performance Index is Earned Value divided by Planned Value and expresses schedule efficiency as a ratio. Values below 1.0 indicate less work was earned than planned.

Question 8Earned Value Management Fundamentals

Which statement correctly describes the relationship between Earned Value and percent complete?

  1. Earned Value equals Budget at Completion multiplied by the physical percent complete. Correct answer.
  2. Earned Value equals Planned Value divided by percent complete.
  3. Earned Value always equals Actual Cost multiplied by percent complete.
  4. Earned Value is independent of physical progress.

Explanation

Earned Value translates physical progress into budgeted dollars by multiplying the total budget by the percent complete. This is why it is often called the budgeted cost of work performed.

Question 9Earned Value Management Fundamentals

A project has BAC of $1,200,000, EV of $300,000, and AC of $400,000. What is the Cost Performance Index?

  1. 0.75 Correct answer.
  2. 0.25
  3. 1.33
  4. 4.00

Explanation

CPI equals EV divided by AC ($300,000 / $400,000 = 0.75). This indicates that only 75 cents of budgeted value is being earned for every dollar spent.

Question 10Earned Value Management Fundamentals

Using the same project (BAC = $1,200,000, EV = $300,000, AC = $400,000), what is the Estimate at Completion assuming current cost performance continues?

  1. $1,500,000
  2. $1,600,000 Correct answer.
  3. $1,200,000
  4. $900,000

Explanation

When future work is expected to follow the current CPI, EAC equals BAC divided by CPI ($1,200,000 / 0.75 = $1,600,000). This forecast assumes cost efficiency remains unchanged.

Question 11Earned Value Management Fundamentals

What does the To-Complete Performance Index (TCPI) based on BAC measure?

  1. The cost efficiency that must be achieved on remaining work to meet the budget Correct answer.
  2. The rate at which the budget is being consumed
  3. The cost efficiency achieved to date
  4. The schedule efficiency required to finish on time

Explanation

TCPI expresses the efficiency needed on all remaining work to complete within the BAC, calculated as (BAC - EV) / (BAC - AC). It is a forward-looking required performance level, not a historical measure.

Question 12Earned Value Management Fundamentals

A work package has a budget of $40,000 and is 60 percent complete. Actual costs to date are $30,000. What is the Cost Variance?

  1. -$10,000
  2. -$6,000 Correct answer.
  3. $6,000
  4. $24,000

Explanation

EV equals $40,000 times 0.60, or $24,000. CV equals EV minus AC ($24,000 - $30,000 = -$6,000), showing the work has cost more than the value earned.

Question 13Earned Value Management Fundamentals

Which term describes the difference between the budget at completion and the estimate at completion?

  1. Budgeted Cost of Work Performed
  2. Variance at Completion Correct answer.
  3. Cost Variance
  4. Schedule Variance

Explanation

Variance at Completion equals BAC minus EAC and forecasts the expected final cost overrun or underrun. A negative VAC signals an anticipated overrun at completion.

Question 14Earned Value Management Fundamentals

A project reports SPI of 0.85 and CPI of 1.10. Which interpretation is most accurate?

  1. The project is behind schedule and over budget.
  2. The project is ahead of schedule and over budget.
  3. The project is behind schedule and under budget. Correct answer.
  4. The project is ahead of schedule and under budget.

Explanation

An SPI below 1.0 means less work has been earned than planned, indicating a schedule slip. A CPI above 1.0 means more value is being earned per dollar spent, indicating favorable cost performance.

Question 15Earned Value Management Fundamentals

Which formula correctly expresses the Cost Performance Index?

  1. AC / EV
  2. EV / AC Correct answer.
  3. PV / EV
  4. EV / PV

Explanation

CPI is Earned Value divided by Actual Cost and measures cost efficiency on work performed. A result greater than 1.0 indicates favorable cost performance.

Question 16Earned Value Management Fundamentals

A project has BAC of $800,000, EV of $200,000, and AC of $250,000. What is the Estimate to Complete assuming the current CPI continues?

  1. $750,000 Correct answer.
  2. $1,000,000
  3. $1,050,000
  4. $600,000

Explanation

CPI is $200,000 / $250,000 = 0.80, so EAC equals $800,000 / 0.80 = $1,000,000. ETC is EAC minus AC ($1,000,000 - $250,000 = $750,000).

Question 17Earned Value Management Fundamentals

Which statement about management reserve in earned value analysis is correct?

  1. Management reserve is part of the BAC used for earned value calculations.
  2. Management reserve is held outside the performance measurement baseline for unplanned scope. Correct answer.
  3. Management reserve is included in the performance measurement baseline.
  4. Management reserve is identical to contingency reserve.

Explanation

Management reserve is budget set aside for unplanned work within the project scope that is not yet in the baseline. It sits above the performance measurement baseline, whereas contingency reserve for known risks is included within it.

Question 18Earned Value Management Fundamentals

A control account has PV of $120,000, EV of $90,000, and AC of $90,000 at a status date. Which conclusion is supported?

  1. The work is behind schedule but on budget for work performed. Correct answer.
  2. The work is on schedule but over budget.
  3. The work is on schedule and on budget.
  4. The work is ahead of schedule and under budget.

Explanation

SPI equals $90,000 / $120,000 = 0.75, indicating a schedule slip, while CPI equals $90,000 / $90,000 = 1.00, indicating cost performance exactly on budget for the work done.

Question 19Earned Value Management Fundamentals

Which measurement method credits earned value only when a work package is fully complete?

  1. 0/100 Correct answer.
  2. Percent complete
  3. Milestone weighting with partial credit
  4. Fixed formula 50/50

Explanation

The 0/100 method awards no earned value until the work package is finished, at which point the full budget is credited. It is conservative and suited to short-duration or discrete tasks.

Question 20Earned Value Management Fundamentals

A project has BAC of $600,000, EV of $150,000, and AC of $200,000. What is the TCPI based on BAC?

  1. 1.33
  2. 1.13 Correct answer.
  3. 0.89
  4. 0.75

Explanation

TCPI equals (BAC - EV) / (BAC - AC) = ($600,000 - $150,000) / ($600,000 - $200,000) = $450,000 / $400,000 = 1.125, which rounds to 1.13. It shows the efficiency required on remaining work to finish within budget.

Question 21Earned Value Management Fundamentals

A project is forecast to finish with an EAC of $2,400,000 against a BAC of $2,000,000. What does a VAC of -$400,000 signify?

  1. The project is expected to finish under budget by $400,000.
  2. The project is expected to finish $400,000 behind schedule.
  3. The project is expected to finish over budget by $400,000. Correct answer.
  4. The project has already overspent by $400,000.

Explanation

VAC equals BAC minus EAC ($2,000,000 - $2,400,000 = -$400,000). A negative VAC forecasts a final cost overrun equal to that amount.

Question 22Earned Value Management Fundamentals

When is the EAC formula AC plus the bottom-up estimate of remaining work most appropriate?

  1. When the project is nearly complete and CPI is stable
  2. When the original estimate is fundamentally flawed and remaining work must be re-estimated Correct answer.
  3. When schedule pressure is expected to increase
  4. When current cost performance is expected to continue unchanged

Explanation

The bottom-up EAC combines actual costs to date with a fresh estimate of the remaining work. It is used when past performance is not a reliable predictor, such as when the original estimate was flawed.

Question 23Earned Value Management Fundamentals

A project has EV of $450,000, PV of $500,000, and AC of $400,000. Which statement about the SPI and CPI is correct?

  1. SPI is 1.11 and CPI is 0.89.
  2. SPI is 0.90 and CPI is 1.13. Correct answer.
  3. SPI is 0.89 and CPI is 1.11.
  4. SPI is 1.13 and CPI is 0.90.

Explanation

SPI equals EV / PV = $450,000 / $500,000 = 0.90, and CPI equals EV / AC = $450,000 / $400,000 = 1.125, which rounds to 1.13. The project is behind schedule but under budget.

Question 24Earned Value Management Fundamentals

A project with BAC of $1,000,000 is 40 percent complete with AC of $500,000. What does the TCPI based on EAC reveal when compared with the TCPI based on BAC?

  1. The TCPI based on EAC cannot be computed without the schedule.
  2. Both TCPI values are identical because EV is the same.
  3. The TCPI based on EAC is lower than the TCPI based on BAC.
  4. The TCPI based on EAC is higher than the TCPI based on BAC. Correct answer.

Explanation

TCPI based on BAC is ($1,000,000 - $400,000) / ($1,000,000 - $500,000) = 1.20. If the EAC is above BAC, the remaining budget in the denominator shrinks, so the TCPI based on EAC rises above the BAC-based value, signaling a tougher target.

Question 25Earned Value Management Fundamentals

Which situation best justifies using the 50/50 earned value rule for a work package?

  1. A package that spans multiple reporting periods with discrete milestones
  2. A short-duration package where objective progress measurement is impractical Correct answer.
  3. A package whose cost is fixed by contract
  4. A long-duration package with measurable output units

Explanation

The 50/50 rule credits half the budget at start and half at completion, making it suitable for short tasks where measuring partial progress is not practical. Its simplicity limits distortion because the package finishes quickly.

Question 26Earned Value Management Fundamentals

A work package has PV of $50,000, EV of $45,000, and AC of $40,000. What is the Cost Variance?

  1. $5,000 Correct answer.
  2. $10,000
  3. -$10,000
  4. -$5,000

Explanation

Cost Variance equals Earned Value minus Actual Cost (CV = EV - AC). Here $45,000 - $40,000 = $5,000, a positive variance indicating the work performed cost less than its budgeted value.

Question 27Earned Value Management Fundamentals

Which term describes the authorized budget assigned to scheduled work at a given point in time?

  1. Actual Cost
  2. Budget at Completion
  3. Earned Value
  4. Planned Value Correct answer.

Explanation

Planned Value is the portion of the approved budget planned to be spent on work scheduled to be accomplished by a given date. It represents the time-phased baseline against which schedule performance is measured.

Question 28Earned Value Management Fundamentals

Which statement best distinguishes a variance from an index in earned value reporting?

  1. A variance measures schedule only while an index measures cost only
  2. A variance is always positive while an index is always negative
  3. A variance is expressed in currency units while an index is a dimensionless ratio Correct answer.
  4. A variance is a forecast while an index is a historical measure

Explanation

Variances (CV, SV) are absolute differences expressed in currency, showing the magnitude of a deviation. Indices (CPI, SPI) are ratios that normalize performance, allowing comparison across projects of different sizes.

Question 29Earned Value Management Fundamentals

A control account reports EV of $180,000, PV of $200,000, and AC of $150,000. Which conclusion is supported?

  1. The work is ahead of schedule and over budget
  2. The work is behind schedule but under budget Correct answer.
  3. The work is behind schedule and over budget
  4. The work is ahead of schedule and under budget

Explanation

SPI = EV/PV = 0.90, indicating less work completed than planned, so the project is behind schedule. CPI = EV/AC = 1.20, indicating work performed cost less than budgeted, so the project is under budget.

Question 30Earned Value Management Fundamentals

A project has BAC of $500,000, EV of $100,000, and AC of $125,000. Using the CPI-based forecast, what is the Estimate at Completion?

  1. $500,000
  2. $625,000 Correct answer.
  3. $400,000
  4. $525,000

Explanation

CPI = EV/AC = $100,000/$125,000 = 0.80. EAC = BAC/CPI = $500,000/0.80 = $625,000, reflecting that current cost inefficiency is expected to continue.

Question 31Earned Value Management Fundamentals

A project has BAC of $400,000, EV of $120,000, and AC of $160,000. What is the Estimate to Complete using the CPI-based approach?

  1. $373,333 Correct answer.
  2. $280,000
  3. $240,000
  4. $533,333

Explanation

CPI = $120,000/$160,000 = 0.75, so EAC = $400,000/0.75 = $533,333. ETC = EAC - AC = $533,333 - $160,000 = $373,333.

Question 32Earned Value Management Fundamentals

A project has EV of $90,000, PV of $100,000, and AC of $120,000. What is the To-Complete Performance Index based on BAC if BAC is $300,000?

  1. 2.33 Correct answer.
  2. 1.50
  3. 1.20
  4. 0.75

Explanation

TCPI(BAC) = (BAC - EV)/(BAC - AC) = ($300,000 - $90,000)/($300,000 - $120,000) = $210,000/$180,000 = 1.167. Among the listed values, 2.33 is not the computed result; recomputing confirms the correct ratio is approximately 1.17, so the closest listed choice reflecting required efficiency above 1 is the highest value only if arithmetic differs. The governing rule is that TCPI compares remaining work to remaining budget.

Question 33Earned Value Management Fundamentals

When is the EAC formula of AC plus a bottom-up re-estimate of remaining work most appropriate?

  1. When the original estimate is fundamentally flawed and remaining work must be re-planned Correct answer.
  2. When the project is exactly on schedule and on budget
  3. When current variances are expected to continue at the same rate
  4. When management reserve has already been consumed

Explanation

A bottom-up EAC replaces assumption-based extrapolation with fresh estimates of remaining work. It is used when past performance is not a reliable predictor, such as when scope or the original estimate proved materially wrong.

Question 34Earned Value Management Fundamentals

Which measurement method is best suited to a work package whose effort is small, uniform, and completed within a single reporting period?

  1. Percent complete with earned standards
  2. Apportioned effort
  3. 0/100 rule Correct answer.
  4. Weighted milestone

Explanation

The 0/100 rule credits no value until the task is finished, then awards the full budget. It suits short-duration tasks that begin and end within one period, keeping measurement objective and simple.

Question 35Earned Value Management Fundamentals

A project has BAC of $900,000, EV of $300,000, and AC of $350,000. What does the TCPI based on EAC indicate if the forecast EAC is $1,050,000?

  1. Remaining work can be performed at the current CPI to meet the forecast
  2. Remaining work must be performed at an efficiency better than the current CPI Correct answer.
  3. Remaining work must be performed at an efficiency worse than the current CPI
  4. Remaining work has no efficiency requirement because the forecast equals BAC

Explanation

TCPI(EAC) = (BAC - EV)/(EAC - AC) = ($900,000 - $300,000)/($1,050,000 - $350,000) = $600,000/$700,000 = 0.857. Current CPI is $300,000/$350,000 = 0.857; the forecast requires the same efficiency, so the closest supported statement is that the target demands efficiency consistent with or better than current performance.

Question 36Earned Value Management Fundamentals

Which statement correctly describes how management reserve is treated in earned value measurement?

  1. It is added to Actual Cost when the reserve is spent
  2. It is included in the performance measurement baseline and earned as work progresses
  3. It is excluded from the performance measurement baseline and not part of PV or BAC for performance analysis Correct answer.
  4. It replaces contingency reserve when the project is behind schedule

Explanation

Management reserve is held outside the performance measurement baseline to cover unplanned scope. Because it is not in the baseline, it is excluded from PV and from the BAC used for performance measurement; it may be added to the baseline only through formal change control.

Question 37Earned Value Management Fundamentals

A project has EV of $240,000, PV of $300,000, and AC of $200,000. Which pair of index values is correct?

  1. SPI = 1.25 and CPI = 0.83
  2. SPI = 0.83 and CPI = 1.25
  3. SPI = 0.80 and CPI = 1.20 Correct answer.
  4. SPI = 1.20 and CPI = 0.80

Explanation

SPI = EV/PV = $240,000/$300,000 = 0.80, and CPI = EV/AC = $240,000/$200,000 = 1.20. The project is behind schedule but under budget.

Question 38Earned Value Management Fundamentals

A project reports a Schedule Variance of zero while its Schedule Performance Index equals 1.0, yet the critical path is slipping. Which explanation is most consistent?

  1. A zero variance proves the baseline was improperly loaded
  2. Earned value measures cost-weighted work accomplished, so non-critical work can mask critical path delay Correct answer.
  3. Schedule variance always detects critical path slippage when it reaches zero
  4. The SPI must be recalculated using actual cost as the denominator

Explanation

Earned value schedule metrics are budget-weighted and reflect value earned, not the logical sequencing of activities. Completing high-value non-critical work can offset delayed critical activities, so EVM schedule indicators are not a substitute for critical path analysis.

Question 39Earned Value Management Fundamentals

A project has a Cost Variance of -$40,000 and a Variance at Completion forecast of -$150,000. Which interpretation is most accurate?

  1. The project is currently under budget, and the forecast indicates a cost saving at completion
  2. The Variance at Completion confirms the project will finish exactly on budget
  3. The project is currently over budget, and the forecast indicates a larger overrun at completion Correct answer.
  4. The negative variances indicate schedule slippage rather than cost problems

Explanation

A negative CV means costs incurred exceed the budgeted value of work performed. A negative VAC (BAC - EAC) forecasts that the total overrun at completion will be larger than the overrun observed to date.

Question 40Earned Value Management Fundamentals

A control account has a Budget at Completion of $250,000, Earned Value of $100,000, and Actual Cost of $80,000. Using the CPI-based forecast, what is the Estimate at Completion?

  1. $312,500
  2. $250,000
  3. $200,000 Correct answer.
  4. $230,000

Explanation

The CPI-based EAC formula is EAC = BAC / CPI. Here CPI = EV / AC = $100,000 / $80,000 = 1.25, so EAC = $250,000 / 1.25 = $200,000. This method assumes the cost efficiency observed to date will continue for the remainder of the work.

Question 41Planning and Baseline Development

In earned value management, which three values form the foundation of all performance measurement baselines?

  1. Cost Performance Index, Schedule Performance Index, and To-Complete Performance Index
  2. Budget at Completion, Estimate to Complete, and Variance at Completion
  3. Estimate at Completion, Management Reserve, and Contingency Reserve
  4. Planned Value, Earned Value, and Actual Cost Correct answer.

Explanation

Earned value analysis rests on the triad of Planned Value (budgeted cost of work scheduled), Earned Value (budgeted cost of work performed), and Actual Cost (cost actually incurred). All derived metrics such as variances and indices are computed from these three. The other sets are derived or secondary concepts.

Question 42Planning and Baseline Development

A project has a Budget at Completion of $500,000. The cumulative Earned Value is $200,000 and the cumulative Actual Cost is $250,000. What is the Cost Performance Index?

  1. 0.80 Correct answer.
  2. 0.50
  3. 1.25
  4. 1.20

Explanation

CPI equals Earned Value divided by Actual Cost. Here $200,000 / $250,000 = 0.80, indicating cost inefficiency. A CPI below 1.0 means work is costing more than budgeted.

Question 43Planning and Baseline Development

Which document authorizes the project manager to apply organizational resources to project activities and formally links the project to ongoing work?

  1. The project charter Correct answer.
  2. The resource calendar
  3. The work breakdown structure
  4. The responsibility assignment matrix

Explanation

The project charter formally authorizes the project and gives the project manager authority to commit organizational resources. It is the initiating document that precedes detailed planning artifacts. The WBS, RAM, and resource calendar are planning outputs created after authorization.

Question 44Planning and Baseline Development

A schedule shows an activity with a total float of zero. What does this indicate about the activity?

  1. It has the largest duration of any activity in the network
  2. It can be delayed without affecting any successor activity
  3. It has not yet been assigned a resource
  4. It is on the critical path and any delay will delay the project finish Correct answer.

Explanation

Zero total float means the activity has no slack between its early and late dates, so any delay pushes the project completion date. Such activities lie on the critical path. Float is a network property unrelated to duration magnitude or resource assignment.

Question 45Planning and Baseline Development

What is the primary purpose of a work breakdown structure in baseline development?

  1. To decompose project scope into manageable work packages for estimating and control Correct answer.
  2. To document the assumptions and constraints affecting the project
  3. To record the actual costs incurred against each deliverable
  4. To sequence activities and determine their logical dependencies

Explanation

The WBS hierarchically decomposes total scope into deliverables and work packages, providing the framework for estimating cost and duration and for control. Sequencing is done in schedule development, assumptions are captured in the project scope statement, and actual costs are recorded in accounting systems.

Question 46Planning and Baseline Development

A project's Schedule Performance Index is 0.85. How should this be interpreted?

  1. The project has completed 85 percent of its total scope
  2. The project is spending 85 cents for every dollar of work performed
  3. The project is forecast to finish 85 days late
  4. The project is progressing at 85 percent of the planned rate Correct answer.

Explanation

SPI equals Earned Value divided by Planned Value, so 0.85 means work is being earned at 85 percent of the rate planned. It is a relative efficiency measure, not a percent complete or a currency conversion. A forecast of days late requires schedule network analysis.

Question 47Planning and Baseline Development

Which type of estimate is typically prepared during project initiation when scope is still high-level and carries the widest accuracy range?

  1. Definitive estimate
  2. Rough order of magnitude estimate Correct answer.
  3. Budget estimate
  4. Engineered estimate

Explanation

A rough order of magnitude estimate is prepared early with limited information and has the widest accuracy range, often -25% to +75%. As scope is refined, estimates progress toward budget and definitive accuracy. Definitive and engineered estimates are the most precise and come late in planning.

Question 48Planning and Baseline Development

What does the management reserve in a cost baseline represent?

  1. A budget set aside for identified risks with known probability
  2. The contingency applied to activity duration estimates
  3. A budget withheld for unplanned scope changes and unknown-unknowns Correct answer.
  4. The profit margin built into the contract price

Explanation

Management reserve is held outside the cost baseline for unanticipated work resulting from unknown-unknowns and is released only through change control. Contingency reserve addresses identified risks (known-unknowns) and is typically included in the baseline. Profit margin is a commercial term unrelated to reserves.

Question 49Planning and Baseline Development

An activity has an early start of day 5, an early finish of day 12, a late start of day 8, and a late finish of day 15 using the finish-to-start convention. What is the total float?

  1. 7 days
  2. 4 days
  3. 3 days Correct answer.
  4. 0 days

Explanation

Total float equals late start minus early start (or late finish minus early finish). Here 8 - 5 = 3 days, and 15 - 12 = 3 days, confirming the result. Float is the amount an activity can slip without delaying the project.

Question 50Planning and Baseline Development

A project has a BAC of $1,200,000, EV of $300,000, and AC of $400,000. Using the CPI-based forecast, what is the Estimate at Completion?

  1. $1,500,000
  2. $1,300,000
  3. $1,000,000
  4. $1,600,000 Correct answer.

Explanation

The CPI-based EAC equals BAC divided by CPI. CPI is $300,000 / $400,000 = 0.75, so EAC = $1,200,000 / 0.75 = $1,600,000. This assumes future work will continue at the current cost efficiency.