PMP · Question #924
While preparing an earned value analysis (EVA) for a project sponsor, the project manager provides the following information in the latest project report: Approved work package cost estimates…
The correct answer is A. 0.91. To determine the cost performance index required for the remaining work to stay within budget, calculate the To-Complete Performance Index (TCPI) using the Budget at Completion (BAC) and the Actual Cost (AC) incurred to date.
Question
While preparing an earned value analysis (EVA) for a project sponsor, the project manager provides the following information in the latest project report:
Approved work package cost estimates: US$9,500 Contingency reserves: US$500 Management reserves: 10% of contingency reserves Percent complete of the project: 50% Planned percent of the project: 40% Actual cost (AC) of the project: US$4,500 According to the project status, the current budget at completion (BAC) is considered achievable. What value represents the cost performance required for the remaining work to keep the project cost goal within the baseline?
Options
- A0.91
- B0.88
- C0.64
- D1.25
How the community answered
(19 responses)- A84% (16)
- C11% (2)
- D5% (1)
Why each option
To determine the cost performance index required for the remaining work to stay within budget, calculate the To-Complete Performance Index (TCPI) using the Budget at Completion (BAC) and the Actual Cost (AC) incurred to date.
The Budget at Completion (BAC) is the total planned budget for the project, calculated as Approved Work Package Cost Estimates ($9,500) plus Contingency Reserves ($500), totaling $10,000. Earned Value (EV) is 50% of BAC, which is $5,000. The To-Complete Performance Index (TCPI) using BAC is calculated as (BAC - EV) / (BAC - AC) = ($10,000 - $5,000) / ($10,000 - $4,500) = $5,000 / $5,500 = 0.9090..., which rounds to 0.91. This indicates that for the remaining work, a cost performance index of at least 0.91 must be achieved to meet the original budget.
This value does not result from the correct TCPI calculation using the provided figures and formula.
This value does not result from the correct TCPI calculation using the provided figures and formula.
This value does not result from the correct TCPI calculation using the provided figures and formula.
Concept tested: Earned Value Management (EVM) - To-Complete Performance Index (TCPI)
Source: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok/earned-value-management
Topics
Community Discussion
No community discussion yet for this question.