This document provides formulas and definitions for various project management terms: 1. It defines the PERT formula as (P + 4M + O)/6, which provides a weighted average estimate of a schedule activity's duration using optimistic, most likely, and pessimistic estimates. 2. It explains variance formulas like activity variance and standard deviation that measure uncertainty in schedule estimates. 3. It outlines earned value formulas like cost variance, schedule variance, cost performance index, and schedule performance index that measure project performance and variance from the plan. 4. It describes estimation formulas like estimated at completion, estimate to complete, and variance at completion that forecast future project costs and schedule based on past performance.

1. Formulas / Math for PMP
Name (Abbreviation) Formula Interpretation (Result)
1. Program evaluation and
review technique (PERT)
(P + 4M + O)/ 6
Pessimistic, Most Likely, Optimistic
Estimated duration of a
schedule activity expressed
as a weight average
2. PERT Standard Deviation
(Single Activity)
(P - O) / 6 Standard deviation from the
mean of a schedule activity
3. PERT Activity Variance
(AV)
[(P - O)/6] ^2 The expected variance in
the activity duration. For
instance: +/- 3 days
4. PERT Standard Deviation
(All Activity)
√(
𝑃−𝑂
6
)^2 === √𝑉 Standard deviation from the
mean of the given series
activities
5. Float or Slack LS-ES and LF-EF
LS: Late Start, ES: Early Start,
LS: Late Finish, EF: Early Finish
If = 0 on critical path
If < 0 Behind schedule
6. Cost Variance (CV) EV – AC
EV = Earned Value
AC = Actual Cost
< 0 Over budget
(negative)
= 0 On budget
> 0 Within budget
(positive)
7. Schedule Variance (SV) EV – PV
PV = Planned Value
< 0 Behind schedule
= 0 On schedule
> 0 Ahead of schedule
8. Cost Perf. Index (CPI) EV / AC < 1 Over budget
= 1 On budget
> 1 Under budget
9. Sched. Perf. Index (SPI) EV / PV < 1 behind schedule
= 1 on schedule
> 1 ahead of schedule
10. Est. At Completion (EAC) BAC / CPI -- CPI remains the same
- if the CPI would remain the same till end
of project, i.e. the original estimation is
not accurate.
- Use formula if no variances from the BAC
have occurred or are expected to
continue at the same rate of spending.
original budget modified by
the cost performance. The
result is a monetary value.
AC + ETC -- Initial Estimates are flawed (original
is flawed)
- if the original estimate is based on
wrong data/assumptions or
circumstances have changed.
- Use formula if original estimate was
fundamentally flawed or condition have
Actual cost plus a new
estimate for the remaining
work. The result is a
monetary value.

2. change and invalided original estimating
assumption
AC + BAC - EV -- Future variance is Atypical
(BAC remains the same)
- the variance is caused by a one-time
event and is not likely to happen again.
- Use formula if current variances are
thought to be atypical in the future.
Actual cost to date plus
remaining budget. Result is
monetary value.
AC + (BAC - EV) / CPI -- Future Variance would
be typical
- Use formula if current variances are
thought to be typical in the future.
Actual cost to date plus
remaining budget, result is
monetary value.
BAC = Budget at completion
New ETC = New Estimate to Completion
11. Est. To Complete (ETC)
Percentage complete
EAC – AC -- we recommended using it, if no
keywords are given.
EV/ BAC *100 -- in percentage
Result is a monetary value
that will tell us how much
more the project will cost
12. Var. At Completion (VAC) BAC – EAC
The different between the originally estimated
BAC and a newly calculated EAC
< 0 Over budget
= 0 On budget
> 0 Under budget
13. To Complete
Performance Index (TCPI)
Values for the TCPI index of less than 1.0 is good
because it indicates the efficiency to complete is
less than planned. How efficient must the project
team be to complete the remaining work with
the remaining money?
(BAC - EV) / (BAC - AC); remaining work /
remaining funds
< 1 Under budget
= 1 On budget
> 1 Over budget
13. Net Present Value Method for financial evaluation long term project,
not required for the exam
Bigger is better (NPV)
14. Present Value PV FV / (1 + r) ^n
Receiving money in the future has different value
than receiving money in the present(today). This
formula calculated how much.
The result is the amount of
money you will end up with
FV if you invest a sum of
money PV for n years at r
% interest
15. Internal Rate of Return Bigger is better (IRR) Not required for the exam
16. Benefit Cost Ratio Bigger is better ((BCR or Benefit / Cost) revenue
or payback VS. cost)
Or PV or Revenue / PV of Cost
17. Payback Period Less is better
Net Investment / Avg. Annual cash flow.
The project with the
shorted period is better and
should be selected.
18. BCWS PV
19. BCWP EV
20. ACWP AC
21. Order of Magnitude
Estimate
-25% - +75% (-50 to +100% PMBOK)
22. Budget Estimate -10% - +25%
23. Definitive Estimate -5% - +10%

3. 24. Comm. Channels N (N -1)/2 – N #of People in one team
25. Expected Monetary
Value
Probability * Impact
26. Point of Total
Assumption (PTA)
((Ceiling Price - Target Price)/buyer's Share
Ratio) + Target Cost
Sigma σ  1σ = 68.27%
 2σ = 95.45%
 3σ = 99.73%
 6σ = 99.99985%

Return on Sales (ROS) Net Income Before Taxes (NEBT) / Total Sales
OR
Net Income After Taxes (NEAT) / Total Sales
Return on Assets (ROA) NEBT / Total Assets OR
NEAT / Total Assets
Return on Investment (ROI) NEBT / Total Investment OR
NEAT / Total Investment
Working Capital Current Assets - Current Liabilities
Discounted Cash Flow Cash Flow X Discount Factor
Contract related formulas Savings = Target Cost – Actual Cost
Bonus = Savings x Percentage
Contract Cost = Bonus + Fees
Total Cost = Actual Cost + Contract Cost
Free Float ES of following activity – ES of present activity –
Duration pf present activity
Number of days this activity
can be delayed without
delaying the early start of
the next activity
Total Float LS- ES or LF-EF Number of days this activity
can be delayed without
delaying the project
Early Finish (EF) ES+duration-1 Day on which this activity
can finish earliest
Early Start (ES) EF of Predecessor +1 Day on which this activity
can start earliest
Late Finish (LF) LS of successor -1 Day on which this activity
can finish latest
Late Start (LS) LF - duration +1 Day on which this activity
can start latest

4. Critical Path formulas
Forward Pass: (Add 1 day to Early Start)
EF = (ES + Duration - 1)
Backward Pass: (Minus 1 day to Late Finish)
LS = (LF - Duration + 1)
ES = Early Start; EF = Early Finish;
LS = Late Start; LF = Late Finish
EVA = Net Operating Profit After Tax - Cost of Capital (Revenue - Op. Exp - Taxes) - (Investment Capital X % Cost of
Capital) EVA - Economic Value Add Benefit Measurement - Bigger is better
Source Selection = (Weightage X Price) + (Weightage X Quality)