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Sample PMP Earned Value Questions Given a project with the following characteristics, answer the following questions:
- You are the project manager of a project to build fancy birdhouses.
- You are to build two birdhouses a month for 12 months.
- Each birdhouse is planned to cost $100.
- Your project is scheduled to last for 12 months.
- It is the beginning of month 10.
- You have built 20 birdhouses and your CPI is .9091.
- How is the project performing? A. Over budget and ahead of schedule B. Under budget and ahead of schedule C. Over budget and behind schedule D. Under budget and behind schedule.
- What is the actual cost of the project right now? A. $1800 B. $2000 C. $2200 D. $
- Assuming that the COST variance experienced so far in the project will continue, how much more money will it take to complete the project? A. $400 B. $440 C. $2800 D. $
- If the variance experienced so far were to stop, what is the project’s estimate at completion? A. $2400 B. $2440 C. $2600 D. $
- What is the project’s TCPI using the project’s budget at completion? A. .5 B. 1 C. 1.5 D. 2
- Senior management wants to the percentage of the project that is complete. What should you report? A. 75% B. 83% C. 92% D. 95%
- Imagine if instead of 10 months and costing $2200, the project was in month three and costing $4000. What formula might you use for BAC? A. [(BAC – EV) / (CPI * SPI)] + AC B. new bottom-up estimate C. AC + new ETC D. AC + BAC – EV Answers:
- A – Over budget & ahead of schedule. The problem tells you that your CPI is .9091, and we know that CPI = EV/AC. Applying that, a CPI less than 1 means that we aren’t getting enough value for each dollar that we put into our project, so it is over budget. However, the project is ahead of schedule because we have built 20 birdhouses and after 9 months, we had expected to build only 2 birdhouses per month * 9 months = 18 birdhouses.
- C – $2200. AC. EV = 20 birdhouse & $100 per birdhouse = $2000.
- CPI = EV/AC
- .9091 = 2000/AC, so multiply both sides by AC
- AC(.9091) = 2000, so divide both side by.
- AC = 2200
- B – $440. ETC = BAC/CPI – AC. We already know the CPI from the problem and AC from the solution to #2, so let’s find BAC.
- BAC = 2 birdhouses per month * 12 months * $100 per birdhouse
- BAC = $
- ETC = BAC/CPI – AC
- ETC = 2400/.909 1 – 2200
- ETC = 440
- C – $2600. A few of the EMV questions you encounter on the PMP exam will be fairly straightforward. This question is asking you for the EAC if a variance that was encountered on a project is expected to stop, so use EAC = AC + BAC – EV.
- EAC = 2200 + 2400 – 2000
- EAC = $ BAC as in question #3, then EV as in question #2.
- D – 2. Fortunately, PMI has to tell you which TCPI formula to use. This one says use BAC, so TCPI = (BAC – EV)/(BAC – AC) = (2400 – 2000) / (2400 – 2200) = 400/200 = 2.
- B – 83%. If you have the percent complete formula in front of you, then this problem is really easy. Just plug EV & BAC into (EV/BAC)*100%, and you’re all set.
- C – AC + new ETC.
Cost Performance Index (CPI) = EV / AC = (₹ 17,50,000 / ₹ 17,50,000) = 1 Since SV is positive and SPI is greater than zero the above project is ahead of schedule. As CV is equal to zero and CPI is equal to one the project is on budget. Earned Value Management Example Problem 3 You are managing a project which is into six months of its execution. You are now reviewing the project status and you have ascertained that project is behind schedule. The actual cost of Activity A is ₹ 2,00,000 and that of Activity B is ₹ 1,00,000. The planned value of these activities are ₹ 1,80,000 and ₹ 80,000 respectively. The Activity A is 100% complete. However, Activity B is only 75% complete. Calculate the schedule performance index and cost performance index of the project on the review date. Solution to EVM Problem 3 First tabulate the data provided in the problem Tasks Planned Value (PV) Actual Cost (AC) % Completion Activity A ₹ 1,80,000 ₹ 2,00,000 100% Activity B ₹ 80,000 ₹ 1,00,000 75% Since we have percentage completion data of each activity we can calculate the earned value. In order to calculate earned value of each activity multiply % completion and the planned value. Therefore, 100% x 1,80,000 = 1,80,000 and 75% x 80,000 = 60,000/- Tasks Planned Value (PV) Actual Cost (AC) % Completion Earned Value (EV) Activity A ₹ 1,80,000 ₹ 2,00,000 100% ₹ 1,80, Activity B ₹ 80,000 ₹ 1,00,000 75% ₹ 60, Now, calculate the cumulative data for the period. Therefore, add planned value, actual costs and earned value of both the activities. Tasks Planned Value (PV) Actual Cost (AC)
Completion Earned Value (EV) Activity A ₹ 1,80,000 ₹ 2,00,000 100% ₹ 1,80, Activity B ₹ 80,000 ₹ 1,00,000 75% ₹ 60, Cumulative ₹ 2,60,000 ₹ 3,00,000 ₹ 2,40, Therefore, Schedule Performance Index (SPI) = EV/PV = 2,40,000/2,60,000 = 0.
And, Cost Performance Index (CPI) = EV/AC = 2,40,000/3,00,000 = 0. Schedule Performance Index (SPI) = 0. Cost Performance Index (CPI) = 0. Since both SPI and CPI are less than one, the project is behind schedule and is experiencing cost overrun. Answer the following:
- When you collect the earned value data for your project, you get the following data: PV = $1,500,000, EV = $ 1,200,000, AC = $1,000,000. You expect the factors for cost variance to continue in the same way in future. The value of the remaining work is $1,000,000. What should be the new EAC for the project? A. $2,400, B. $2,233, C. $2,000, D. $1,833, Correct Answer: D Solution: EAC= BAC/CPI, BAC = 1,200,000+1,000,000=2,200,000. CPI = EV/AC = 1,200,000/1,000,000 = 1.2. EAC = 2,200,000/1.2 = 1,833,
- The latest Earned value report of the project shows CPI = 1.2, SPI = 0.8, PV = $500,000, SV = - $220,000. What is the Cost Variance of the project? A. $486, B. $280, C. $46, D. $233, Correct Answer: C Solution: EV= PV+SV = 500000 – 220000 = $280,000, AC = EV/CPI =280000/1.2 = $233,333.
- The earned value data for a project has been derived as below. PV=$400,000, EV=$400,000, AC =$600,000. What is the burn rate of the project? A. 0. B. 1 C. 1. D. 1. Correct Answer: D Solution: Burn rate is 1/CPI. CPI = EV/AC = 400000/600000 = 0.6666... Burn rate = 1/0.66666 =
- You are managing a telecommunications project. The project is expected to be completed in 10 months at a cost of $12000 per month. After 2 months, you realize that the project is 30% completed at a cost of $60,000. What are the Earned Value (EV) and the Cost Variance (CV)? A. EV = ($16,000); CV= $26, B. EV = $16,000; CV= ($20,000) C. EV = $36,000 ; CV= $24, D. EV = $36,000; CV= ($24,000) Correct Answer: D Solution: BAC=1200010 = 120000, EV=30%120000=36000, CV= EV - AC = 36000 - 60000 =
- You are managing a constructions project. You have completed half the project work. The total planned cost at this stage is $1000. The actual work that has been completed at this stage is worth $1200. You have spent $1500 already on the project. What is the CPI?
A. 0.
B. 0.
C. 4
D. 1.
Correct Answer: B Solution: CPI = EV/AC = 1200/ 1500 = 0.
- A software development project that you are managing has budget at completion of $400,000. At month seven, 65% of the work was planned to be complete but stands at 50%. Actual cost is $275,000. What is the project's ETC? A. $55,00 0 B. $389, C. $289, D. $275, Correct Answer: D Solution: CPI = 50% *400000/ 275000 = 0.72 EAC = BAC/CPI = 400000/0.72 = 550000. ETC = EAC – AC = 550000 - 275000= 275000
- You perform an earned value analysis for your project, resulting in the following numbers: EV: 354,000; PV: 454,000; AC: 474,000. Which results are correct? A. CV: +120,000; SV: +100, B. CV: +100,000; SV: +120, C. CV: - 100,000; SV: - 120,
