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You are on page 1of 9

Question

You are managing a project with budget at completion (BAC) $ 80,000. The actual cost to

date you have seen is $ 25,000 and earned value is $ 17,000. You calculate estimate to

complete (ETC) to $ 75,000 by doing bottom-up sum of all costs. After so many calculations,

what is the estimate at completion (EAC) for the project?

$ 57,000

$ 100,000

$ 60,000

$ 53,000

2. 2. Question

You are the project manager and want to calculate TCPI based on EAC for your project. The

data you have with you is BAC: $ 135,000, earned value for your project : $ 45,000, actual

costs : $ 70,000 and EAC is $130,000. What is the TCPI that you will get from these values?

1.1

0.9

1.5

0

3. 3. Question

Ray is the project manager of a project having budget $18,000 and is expected to last for 12

months. The work and budget is spread evenly across all 12 months. The current CPI of the

project is 0.9. What will be the Variance at Completion for Ray’s project?

-$ 1,500

-$ 2,000

$ 20,000

$ 19,000

4. 4. Question

Earned value analysis of your project shows the following values: EV = 80,000, ETC = 90,000,

EAC = 180,000, PV = 100,000, AC = 80,000. Which of the following is true regarding the

project?

The project is on schedule and below budget

The EAC is incorrect

The project is behind schedule and on budget

5. 5. Question

A new project manager in your company is asked to make a report for a project where the

work is performed at the budgeted rate. He asks for your help and provide these values to you

BAC = $ 35,000, Earned value (EV) = $25,000, planned value (PV) = $24,000 and actual cost

(AC) = $ 28,000. What is the value of Estimate At Completion (EAC) ?

$ 24,000

$ 36,000

$ 38,000

37,000

6. 6. Question

Calculate EAC with values given PV = 85, EV = 100, BAC = 380, AC = 92, CV = 3, ETC = 280

and variances from the BAC are expected to continue at the same rate.

349.6

348.3

402.4

351.4

7. 7. Question

As a project manager find out schedule variance with the following values provide, EV = 81

and SPI = 0.9 .

-7

-8

-9

8. 8. Question

Ruby’s project metrics says that her project has for SPI of .83 and CPI of 1.3. How cans

Ruby’s Project status BEST described?

Project is behind schedule and over budget

Project is behind schedule and under budget

Project is ahead of schedule and over budget

9. 9. Question

Sam is managing a project having total planned value (PV) as $ 300,000. After 4.5 months ,

the actual costs incurred turned out to be $405,000. Sam is trying to find out that how he can

limit the actual cost of the project. Out of the following what is the option Sam has?

Actual cost can be two times the planned value

Actual cost can be four times the planned value

The AC will not have an upper limit

A project is estimated to cost $ 70,000 with a timeline of 60 days. After 30 days, the project

manager finds that 50% of the project is complete and Actual costs are $ 50,000. Calculate the

Cost Performance Index (CPI)?

CPI = 1

CPI = 0.8

CPI = 0.6

CPI = 0.7

You are managing a project which is estimated to cost $ 300,000 with a timeline of 10 months.

Due to some reasons schedule was slightly delayed and the net result was that there was

some additional cost in the project. At the end of the third month, you review the project and

find that the project is 30% complete and Actual Costs are $ 50,000. The Estimate to complete

(ETC) for the project would now be:

$200,000

$210,000

$230,000

$220,000

Calculate how much would be the ETC with values PV = 105, EV = 115, BAC = 440, AC =

105, CV = 4, ETC = 330, EAC =410. The ETC is given as 330. However, how much would the

Estimate to Complete be if we assume that current variances are thought to be atypical?

330

325

305

295

13. 13. Question

You are managing two projects from a single Business Unit and happy over the success of

both the projects as both projects are regarding as strategically beneficial and have been

finishes by over 85%. The project sponsor requested earned value data on these two

concurrent projects from you and these both projects are equally important for the sponsor.

You provide the following information to the sponsor:

Project A:

PV: $1,900,000

EV: $2,400,000

AC: $2,100,000

Project B:

PV: $2,100,000

EV: $1,600,000

AC: $1,700,000

After reviewing the data provided to him, the sponsor considers to shift some resources from

project A to project B to speed up the second project which is currently behind schedule.

What is the most likely outcome of such a measure?

To increase cost efficiency - Changing team assignments during late course of a project

typically increases cost efficiency.

To increase time efficiency - Changing team assignments during late course of a

project typically increases time efficiency

According to the law of diminishing returns, the consolidated cost variance of the two

projects will decrease.

According to the law of diminishing returns, the consolidated cost variance of the two

projects will increase.

Which of the following statements is NOT true regarding EV (Earned value) of a project?

The cost performance index is calculated using earned value and actual cost

The schedule variance is the difference between the earned value and the planned

value

The earned value is the value of work to be completed in terms of the approved budget

The earned value is measured against the performance measurement baseline

You are the project manager of a software enhancement project, where the application needs

to be migrated to the new version of the software and along with it a new module need to be

added. The planned value of the software version enhancement is $100,000 and planned

value for new module to be added is $ 300,000. After 5 months, you do a performance

measurement analysis to see how you are doing. The analysis showed that you are not ahead

of schedule and actual costs for the version enhancement and new module were $115,000

and $350,000 and up to this point version update is 100% complete and module is only 80%

complete. If you calculate of CPI at this point in the project, what it would be?

0.84

1.5

0.67

0.73

1.B

2.c

AC) which when implemented in this scenario gives us (135000 − 45000) / (130000 − 70000)

= 90000 /60000 = 1.5

3.b

4.d

The project is behind schedule because our Earned Value tells us that we have earned only

80,000 and the Planned Value shows that at this time in the project we should have earned

100,000. Therefore we are 20,000 behind schedule. We are on budget because both our

Actual Cost and Earned Value are 80,000

5.c

When project work is performed at budgeted rate EAC can be calculated using the formula

(EAC) = AC + BAC – EV

After putting the values of all, it comes out to be $ 28,000 + $ 35,000 – $ 25,000 = $ 38,000

6.a

Explanation – The formula for calculating the Estimate at Completion (EAC) if we expect the

variances to continue at the current rate is EAC=BAC/CPI. However, the question does not

give you the CPI.

Now you can calculate the EAC: EAC = BAC / CPI = 380 / 1.0869 =349.61

7.d

Formula to calculate SV = EV – PV

No value for PV is provided, it can be calculated using the formula SPI = EV /PV

PV = EV / SPI = 81 / 0.9 = 90

8.c

SPI is Schedule Performance Index which indicates the efficiency of the time utilized on the

project. If SPI is above 1 – it indicates efficient utilization of time allocated to the project and

SPI lower than 1 shows team is not utilizing time allocated for the project efficiently. The

question says SPI of the project is .83 that means – Project is behind schedule.

CPI is Cost Performance Index showing the efficiency of the utilization of the resources on the

project. If value of CPI is above 1, it indicates good utilization of the resources allocated to the

project and lower than 1 value of CPI shows poor utilization of resources in the project.

Question says CPI is 1.3 that means – Project is doing good and under budget.

9.d

10.d

expressed as ratio of earned value to actual cost i.e. CPI = EV/AC where EV is the Earned

Value and AC is the Actual Cost.

Earned Value = 50% of $ 70,000 = $ 35,000 since 50% of the project is complete.

A value less than 1 of CPI indicates cost overruns in the projects which is quite apparent also

in the current scenario.

11.b

EV, Earned Value = (3/ 10 ) * 300,000 = $90,000 (as 30% project of the project is complete )

12.b

The formula for calculating the ETC when variances are atypical is ETC =

13.c

PV – Planned value , EV – Earned value and AC – Actual cost , these parameters can

provide the cost variance of the projects (CV = EV- AC). Cost Variance is very important

factor to measure project performance by giving information that is how much over or under

budget the project is. Cost Variance for Project A = $2,400,000 – $2,100,000 = $300,000 and

CV for project B = $1,600,000 – $1,700,000 = -$100,000. Positive CV means project is under

budget and negative value of CV project is over budget. So by shifting resources from Project

A to B the consolidated cost variance of both the projects will decrease and help project B to

be on the right track and right schedule.

14.c

Options A, B and D are correct regarding EV. Option C Points towards Planned value not

Earned value. Definition of planned value – Planned Value (PV) is the authorized budget

assigned to work to be accomplished for an activity or WBS component.

15.d

Get total actual costs of the project – $115,000 + $350,000 = $465,000

$340,000

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