PK0-003 · Question #458
A project has a CPI of 0.6. Which of the following would BEST describe the cost-efficiency of the project?
The correct answer is A. The costs are currently over the estimates.. A Cost Performance Index (CPI) of 0.6 indicates that the project is over budget, meaning the actual costs are exceeding the earned value and thus the initial estimates.
Question
A project has a CPI of 0.6. Which of the following would BEST describe the cost-efficiency of the project?
Options
- AThe costs are currently over the estimates.
- BThe costs and the estimates are about the same.
- CThe costs are currently under the estimates.
- DThe earned value is greater than the actual cost.
How the community answered
(29 responses)- A76% (22)
- B7% (2)
- C3% (1)
- D14% (4)
Why each option
A Cost Performance Index (CPI) of 0.6 indicates that the project is over budget, meaning the actual costs are exceeding the earned value and thus the initial estimates.
The Cost Performance Index (CPI) is calculated as Earned Value (EV) divided by Actual Cost (AC). A CPI less than 1.0, such as 0.6, signifies that the project is spending more money than the value of the work accomplished, indicating that costs are currently exceeding the estimates.
A CPI of 1.0 indicates that costs and estimates are about the same, meaning the project is exactly on budget.
A CPI greater than 1.0 would indicate that costs are currently under the estimates, meaning the project is under budget.
If the earned value were greater than the actual cost, the CPI would be greater than 1.0, indicating the project is under budget.
Concept tested: Cost Performance Index (CPI) interpretation
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