ISEB-PM1 · Question #509
If the earned value (EV) is $1000, actual cost (AC) is $800, and planned value (PV) is $1500, what would be the cost performance index (CPI)?
The correct answer is C. 1.25. CPI = EV ÷ AC = $1,000 ÷ $800 = 1.25, making C correct. A CPI above 1.0 means you're getting more value than you're spending - you're under budget, which is favorable. Why the distractors are wrong: A (0.66) uses EV ÷ PV ($1,000 ÷ $1,500), which is actually the Schedule…
Question
If the earned value (EV) is $1000, actual cost (AC) is $800, and planned value (PV) is $1500, what would be the cost performance index (CPI)?
Options
- A0.66
- B0.8
- C1.25
- D1.5
How the community answered
(32 responses)- A16% (5)
- B6% (2)
- C72% (23)
- D6% (2)
Explanation
CPI = EV ÷ AC = $1,000 ÷ $800 = 1.25, making C correct. A CPI above 1.0 means you're getting more value than you're spending - you're under budget, which is favorable.
Why the distractors are wrong:
- A (0.66) uses EV ÷ PV ($1,000 ÷ $1,500), which is actually the Schedule Performance Index (SPI), not CPI - a common mix-up.
- B (0.8) flips the formula, dividing AC ÷ EV ($800 ÷ $1,000) - the inverse of CPI, which has no standard meaning.
- D (1.5) divides PV ÷ EV ($1,500 ÷ $1,000), combining the wrong variables entirely.
Memory tip: Think "CPI = Earned over Actual" - you earned something and compare it to what it actually cost you. If earned > actual, you're winning (CPI > 1). Don't let the PV distract you - PV is for schedule, not cost.
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