CAPM Project Management Exam Prep

Category - Cost Management

You are the CEO and your Project Gamma PM comes in and reports to you that Gamma has an EV of $100,000, PV of $80,000 and AC of $110,000. How would you BEST describe this project?
  1. Gamma is ahead of schedule and within its budget
  2. Gamma is behind schedule and within its budget
  3. Gamma is ahead of schedule, but over-budget
  4. Gamma is behind schedule and over-budget
  5. There isn’t enough information to determine project status.
Explanation
Answer: C - This is a calculation question that’s asking you to use SPI and CPI to evaluate your project.
Use the formula SPI = EV / PV
SPI = $100,000 / $80,000 = 1.11
Then calculate CPI = EV / AC
$100,000 / $110,000 = 0.91
So SPI is 1.11 and CPI is .91. Your project is ahead of schedule but over-budget.

Key Takeaway: This is a bit trickier question asking you to calculate the SPI and CPI. Stay calm and double check your calculations if you have time.
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