If the EV is $3,000 and the AC is $4,000, which of the following would be the CPI for the project?

The correct answer is B. .75. The CPI (Cost Performance Index) is a metric used to measure the cost efficiency of a project, calculated by dividing the Earned Value (EV) by the Actual Cost (AC).

Project management concepts

Question

Options

A.50
B.75
C1.25
D1.75

How the community answered

(43 responses)

A
19% (8)
B
70% (30)
C
5% (2)
D
7% (3)

Why each option

The CPI (Cost Performance Index) is a metric used to measure the cost efficiency of a project, calculated by dividing the Earned Value (EV) by the Actual Cost (AC).

A.50

This result of 0.50 would be obtained from an incorrect calculation, not from dividing EV by AC with the given values.

B.75Correct

The CPI is calculated using the formula EV / AC. With an EV of $3,000 and an AC of $4,000, the CPI is $3,000 / $4,000 = 0.75.

C1.25

This result of 1.25 would be obtained if Actual Cost (AC) was divided by Earned Value (EV), which is the inverse of the correct CPI formula.

D1.75

This result of 1.75 is incorrect and does not correspond to the CPI formula using the provided Earned Value and Actual Cost.

Concept tested: Cost Performance Index (CPI) calculation

Source: https://learn.microsoft.com/en-us/azure/devops/report/powerbi/cost-performance-index?view=azure-devops

Topics

#earned value management#CPI#cost performance index#project control

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