PMI-RMP · Question #127
You are the project manager of the NNH project. In this project you have created a contingency response that the cost performance index should be less than 0.93. The NHH project has a budget at…
The correct answer is D. 0.93. The Cost Performance Index (CPI) measures cost efficiency by dividing earned value by actual cost. With a BAC of $945,000 at 45% complete and actual spend of $455,897, the CPI calculates to approximately 0.93.
Question
You are the project manager of the NNH project. In this project you have created a contingency response that the cost performance index should be less than 0.93. The NHH project has a budget at completion of $945,000 and is 45 percent complete - though the project should be 49 percent complete. The project has spent $455,897 to reach the 45 percent complete milestone. What is the project's cost performance index?
Options
- A1.06
- B0.92
- C-$30,647
- D0.93
How the community answered
(48 responses)- A13% (6)
- B6% (3)
- C4% (2)
- D77% (37)
Why each option
The Cost Performance Index (CPI) measures cost efficiency by dividing earned value by actual cost. With a BAC of $945,000 at 45% complete and actual spend of $455,897, the CPI calculates to approximately 0.93.
A CPI of 1.06 would indicate the project is performing under budget, which contradicts the data showing actual costs of $455,897 exceeding the earned value of $425,250.
0.92 is slightly lower than the accurately calculated result of approximately 0.9327 and does not correctly reflect the division of earned value by actual cost.
Negative $30,647 represents the cost variance (EV minus AC = $425,250 - $455,897), which is a dollar-denominated metric, not the dimensionless CPI ratio.
CPI = EV / AC, where EV = 45% x $945,000 = $425,250 and AC = $455,897. Dividing $425,250 by $455,897 yields approximately 0.9327, which rounds to 0.93 and confirms the contingency response threshold has been triggered since the CPI is not greater than 0.93.
Concept tested: Earned value management - Cost Performance Index calculation
Source: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok
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