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Task 5: Plan and manage budget and resourcesearned-value-managementcost-performanceproject-forecastingcalculations
PMP · Question 05 · Task 5: Plan and manage budget and resources
A project has the following earned value metrics at the end of Month 6:<br/>- Budget at Completion (BAC): $500,000<br/>- Planned Value (PV): $300,000<br/>- Earned Value (EV): $250,000<br/>- Actual Cost (AC): $280,000<br/><br/>The project manager needs to calculate the Estimate at Completion (EAC) assuming current cost performance will continue for the remainder of the project. What is the EAC? (Round to the nearest dollar, enter numbers only)
A project has the following earned value metrics at the end of Month 6:<br/>- Budget at Completion (BAC): $500,000<br/>- Planned Value (PV): $300,000<br/>- Earned Value (EV): $250,000<br/>- Actual Cost (AC): $280,000<br/><br/>The project manager needs to calculate the Estimate at Completion (EAC) assuming current cost performance will continue for the remainder of the project. What is the EAC? (Round to the nearest dollar, enter numbers only)
How to approach this question
Calculate CPI first (EV/AC), then use EAC = BAC/CPI when assuming current performance continues. CPI = 250,000/280,000 = 0.893, EAC = 500,000/0.893 = 560,000
Full Answer
560000
When current cost variances are typical and expected to continue, EAC = BAC/CPI. CPI = EV/AC = 250,000/280,000 = 0.893. EAC = 500,000/0.893 = 560,000.
Common mistakes
Using EAC = AC + BAC - EV (which assumes no future variances) or forgetting to calculate CPI first, or rounding errors in intermediate calculations.
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