PGMP · Question #150
You are the program manager for your organization. Your current program has a budget at completion of $3,450,000 and is expected to last two years. The program is currently 30 percent complete and has
The correct answer is C. $3,795,000. Using EVM, the program's CPI of approximately 0.909 (from a 10% cost overrun) applied to the BAC of $3,450,000 yields an EAC of $3,795,000.
Question
You are the program manager for your organization. Your current program has a budget at completion of $3,450,000 and is expected to last two years. The program is currently 30 percent complete and has spent ten percent more than what it should have to arrive at this point in the program schedule. Based on this information, what is estimate at completion (EAC) for this program?
Options
- A$2,656,500
- BThere is not enough information to know.
- C$3,795,000
- D$1,035,000
How the community answered
(21 responses)- A10% (2)
- B14% (3)
- C71% (15)
- D5% (1)
Why each option
Using EVM, the program's CPI of approximately 0.909 (from a 10% cost overrun) applied to the BAC of $3,450,000 yields an EAC of $3,795,000.
$2,656,500 does not result from any standard EAC formula applied to the values given in this scenario.
There is sufficient information to calculate EAC - the BAC, percent complete, and cost performance ratio (10% overrun) provide everything needed for the EAC = BAC/CPI formula.
EV = 30% x $3,450,000 = $1,035,000. Because the program spent 10% more than planned, AC = $1,035,000 x 1.10 = $1,138,500. CPI = EV/AC = $1,035,000 / $1,138,500 = 0.9091. EAC = BAC / CPI = $3,450,000 / 0.9091 = $3,795,000, confirming option C as correct.
$1,035,000 is the earned value (EV) representing 30% of BAC, not the estimate at completion for the entire program.
Concept tested: Estimate at completion calculation using CPI and EVM
Source: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok
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