PMI-RMP · Question #250
You are the project manager of the NHJ project for your company. This project has a budget at completion of $1,650,000 and you are 60 percent complete. According to the project plan, however, the proj
The correct answer is B. $1,666,667. Calculate using EAC = BAC / CPI, where CPI reflects current cost performance. First, compute Earned Value (EV): EV = BAC × Actual % Complete = $1,650,000 × 0.60 = $990,000. Then compute CPI: CPI = EV / AC = $990,000 / $995,000 ≈ 0.99. Finally, EAC = BAC / CPI = $1,650,000 / 0.99
Question
You are the project manager of the NHJ project for your company. This project has a budget at completion of $1,650,000 and you are 60 percent complete. According to the project plan, however, the project should be 65 percent complete. In this project you have spent $995,000 to reach this point of completion. There is a risk that this project may be late so you have taken some measures to recover the project schedule. Management would like to know, based on current performance, what the estimate at completion for this project will be. What is the estimate at completion?
Options
- A$1,650,000
- B$1,666,667
- C$663,333
- D-$8,333
How the community answered
(55 responses)- A9% (5)
- B73% (40)
- C15% (8)
- D4% (2)
Explanation
Calculate using EAC = BAC / CPI, where CPI reflects current cost performance. First, compute Earned Value (EV): EV = BAC × Actual % Complete = $1,650,000 × 0.60 = $990,000. Then compute CPI: CPI = EV / AC = $990,000 / $995,000 ≈ 0.99. Finally, EAC = BAC / CPI = $1,650,000 / 0.99 ≈ $1,666,667. This formula assumes future work will be performed at the same efficiency rate as past work. Option A ($1,650,000) is just the BAC, ignoring cost overruns. Option C ($663,333) represents the Estimate to Complete (ETC) using an alternate calculation. Option D (-$8,333) approximates the Cost Variance (CV = EV − AC = $990,000 − $995,000 = −$5,000), not the EAC.
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