A project manager is calculating the current budget. The earned value (EV) of the project is lower than the actual cost (AC) of the project. How should the project manager report the status of the pro

The correct answer is D. The project is at risk as the cost variance (CV) is negative.. Cost Variance (CV) is calculated as CV = EV − AC. If EV is lower than AC, then CV is negative, meaning the project has spent more money than the value of work actually completed - the project is over budget and at financial risk. Answer D correctly identifies both the condition (

Predictive, Plan-Based Methodologies

Question

A project manager is calculating the current budget. The earned value (EV) of the project is lower than the actual cost (AC) of the project. How should the project manager report the status of the project?

Options

AThe project is tracking well as the cost variance (CV) is negative.
BThe project is within budget but is delayed.
CThe project is within budget and within schedule.
DThe project is at risk as the cost variance (CV) is negative.

How the community answered

(53 responses)

A
2% (1)
B
6% (3)
C
11% (6)
D
81% (43)

Explanation

Cost Variance (CV) is calculated as CV = EV − AC. If EV is lower than AC, then CV is negative, meaning the project has spent more money than the value of work actually completed - the project is over budget and at financial risk. Answer D correctly identifies both the condition (CV is negative) and the implication (the project is at risk). Answer A is factually correct about CV being negative but incorrectly characterizes it as 'tracking well.' Answer B incorrectly states the project is within budget. Answer C is entirely incorrect on both budget and schedule fronts.

Topics

#Earned Value Management (EVM)#Cost Variance (CV)#Project Cost Management#Performance Measurement

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