PMI-RMP · Question #183
Mark works as a project manager of the NNH project. In this project, he has created a contingency response that the cost performance index should be less than 0.91. The NHH project has a budget at…
The correct answer is C. 0.87. CPI (Cost Performance Index) = EV / AC, where EV is Earned Value and AC is Actual Cost. First, calculate EV: EV = % Complete × BAC = 0.43 × $950,000 = $408,500. The Actual Cost (AC) is given as $470,897. Therefore: CPI = $408,500 / $470,897 ≈ 0.867, which rounds to 0.87. A CPI…
Question
Mark works as a project manager of the NNH project. In this project, he has created a contingency response that the cost performance index should be less than 0.91. The NHH project has a budget at completion of $950,000 and is 43 percent complete - though the project should be 50 percent complete. The project has spent $470,897 to reach the 43 percent complete milestone. What is the project's cost performance index?
Options
- A0.95
- B0.80
- C0.87
- D0.91
How the community answered
(45 responses)- A2% (1)
- B7% (3)
- C80% (36)
- D11% (5)
Explanation
CPI (Cost Performance Index) = EV / AC, where EV is Earned Value and AC is Actual Cost. First, calculate EV: EV = % Complete × BAC = 0.43 × $950,000 = $408,500. The Actual Cost (AC) is given as $470,897. Therefore: CPI = $408,500 / $470,897 ≈ 0.867, which rounds to 0.87. A CPI below 1.0 means the project is over budget (spending more than the value earned). Since 0.87 < 0.91, the contingency response would be triggered. The 50% planned completion figure is used to calculate Schedule Variance (SV), not CPI.
Topics
Community Discussion
No community discussion yet for this question.