PK0-004 · Question #234
An active project has a CPI of 0.92. Which of the following can be determined?
The correct answer is A. The project is currently over budget. A CPI below 1.0 means the project is spending more money than the value of work completed, confirming it is over budget.
Question
An active project has a CPI of 0.92. Which of the following can be determined?
Exhibit
Options
- AThe project is currently over budget.
- BThe project has a budget surplus.
- CThe project is ahead of schedule.
- DThe project is behind schedule.
How the community answered
(42 responses)- A88% (37)
- B2% (1)
- C7% (3)
- D2% (1)
Why each option
A CPI below 1.0 means the project is spending more money than the value of work completed, confirming it is over budget.
The Cost Performance Index is calculated as Earned Value divided by Actual Cost; a CPI of 0.92 means the project is generating only $0.92 of planned value for every $1.00 actually spent. Any CPI less than 1.0 indicates a cost overrun, so the project is definitively over budget at this point in time.
A budget surplus requires a CPI greater than 1.0, which would indicate more work is being completed than the money spent would predict.
Schedule performance is measured by the Schedule Performance Index, not the CPI; the CPI value alone provides no information about whether the project is ahead of schedule.
Being behind schedule is indicated by an SPI less than 1.0; the CPI only reflects cost efficiency and cannot be used to determine schedule status.
Concept tested: Earned Value Management - Cost Performance Index interpretation
Source: https://www.pmi.org/learning/library/earned-value-management-best-practices-7045
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