Sample-PMP-Earned-Value

1. 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.
1. 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.
2. What is the actual cost of the project right now?
A. $1800 B. $2000 C. $2200 D. $2400
3. 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. $2840
4. If the variance experienced so far were to stop, what is the project’s estimate at completion?
A. $2400 B. $2440 C. $2600 D. $2800
5. What is the project’s TCPI using the project’s budget at completion?
A. .5 B. 1 C. 1.5 D. 2
6. Senior management wants to the percentage of the project that is complete. What should you
report?
A. 75% B. 83% C. 92% D. 95%

2. 7. 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:
1. 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.
2. 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 .9091
• AC = 2200
3. 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 = $2400
• ETC = BAC/CPI – AC
• ETC = 2400/.9091 – 2200
• ETC = 440
4. 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 = $2600
BAC as in question #3, then EV as in question #2.
5. 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.
6. 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.
7. C – AC + new ETC.

3. Compute Estimate At Completion (EAC) and Variance At Completion (VAC) if both SPI and CPI
influence the project work when given variables are
• Budget At Completion (BAC) = $22,000
• Earned Value (EV) = $13,000
• Planned Value (PV) = $14,000
• Actual Cost (AC) = $15,000
EAC (if the both SPI and CPI influence the project work) = AC + [(BAC – EV) / (CPI x SPI)]
1. Schedule Performance Index (SPI) = EV/PV = $13,000/$14,000 = 0.93 Since SPI is less
than 1, this indicates that the project is behind schedule
2. Cost Performance Index (CPI) = EV/AC = $13,000/$15,000 = 0.87 Since CPI is less than
1, this indicates that the project is over budget.
3. EAC = $15000 + [($22,000 – $13,000)/(0.93 X 0.87)] = $26,123
4. VAC = BAC – EAC = $22,000 – $26,123 = -$4,123 The project is experiencing a budget
overrun of -$4,123.
For the following project calculate SV,CV, SPI and CPI at the end of second month.
Month 1 2 3 4
Planned Value ₹ 11,10,000 ₹ 6,00,000 ₹ 25,00,000 ₹ 8,00,000
Earned Value ₹ 10,00,000 ₹ 7,50,000
Actual Cost ₹ 12,50,000 ₹ 5,00,000

4. 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% ₹ 1,80,000
Activity B ₹ 80,000 ₹ 1,00,000 75% ₹ 60,000
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% ₹ 1,80,000
Activity B ₹ 80,000 ₹ 1,00,000 75% ₹ 60,000
Cumulative ₹ 2,60,000 ₹ 3,00,000 ₹ 2,40,000
Therefore, Schedule Performance Index (SPI) = EV/PV = 2,40,000/2,60,000 = 0.92

5. And, Cost Performance Index (CPI) = EV/AC = 2,40,000/3,00,000 = 0.8
Schedule Performance Index (SPI) = 0.92
Cost Performance Index (CPI) = 0.8
Since both SPI and CPI are less than one, the project is behind schedule and is experiencing cost
overrun.
Answer the following:
1. 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. $2,400,000
B. $2,233,333
C. $2,000,000
D.

6. CV = EV - AC = 280000 – 233333 = $46,666
3. When you analyze earned value data for your project, you get the following information:
CPI = .84, and the EV is $48,000. How much money has actually been spent on the project?
A. $40,320
B. $57,145
C. $37,654
D. There is not enough information to calculate the actual cost
Correct Answer: B
Solution: CPI = EV/AC; AC = EV/CPI = 48,000/0.84 = 57,145
4. The project is budgeted at $1,000,000. The following earned value figures have been
derived. PV=$500,000, EV = $450,000, AC= $550,000. The cost variances in the project are
caused by one-time factors which are no more effective. What will be the estimate at completion
for the project?
A. $1,000,000
B. $1,100,000
C. $900,000
D. $1,222,222
Correct answer: B
Solution: When the cost variance caused is one time and not expected to continue (the future
work will be accomplished at the planned rate), EAC= AC+BAC-EV. EAC = 550000 + 1000000
– 450000 = 1,100,000

7. 5. 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. 0.66
B. 1
C. 1.6
D. 1.5
Correct Answer: D
Solution: Burn rate is 1/CPI. CPI = EV/AC = 400000/600000 = 0.6666... Burn rate = 1/0.66666 =
1.5
6. 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= $26,000
B. EV = $16,000; CV= ($20,000)
C. EV = $36,000 ; CV= $24,000
D. EV = $36,000; CV= ($24,000)
Correct Answer: D
Solution: BAC=12000*10 = 120000, EV=30%*120000=36000, CV= EV - AC = 36000 - 60000 =
-24000
7. 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?

8. A. 0.5
B. 0.8
C. 4
D. 1.25
Correct Answer: B
Solution: CPI = EV/AC = 1200/ 1500 = 0.8
8. 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. $55,000
B. $389,855
C. $289,000
D. $275,000
Correct Answer: D
Solution: CPI = 50% *400000/ 275000 = 0.72 EAC = BAC/CPI = 400000/0.72 = 550000. ETC
= EAC – AC = 550000-275000= 275000
9. 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: +100,000
B. CV: +100,000; SV: +120,000
C. CV: -100,000; SV: -120,000

9. D. CV: -120,000; SV: -100,000
Correct Answer: D
Solution: CV = EV – AC = 354,000 – 474,000 = -120,000;
SV = EV – PV = 354,000 – 454,000 = -100,000
10. During your project analysis, you understand that there is a cost-variance in the project.
Further analysis shows that it is a one-time variance caused by an unexpected rework. You do
not expect such situation in future. You would like to get the Estimate at completion for your
project, so you perform earned value analysis and get the following data: EV = 2,000,000; PV =
1,500,000; AC = 2,500,000; BAC = 4,000,000. What is EAC?
A. 4,500,000
B. 5,000,000
C. 4,000,000
D. 5,500,000
Correct Answer: A
Solution: When the variations are one-time, then EAC = AC+BAC-EV = 2,500,000 +
4,000,000 – 2,000,000 = 4,500,000