Please login or join to subscribe to this thread
Q&A PMBOK question 119...
|
|
Lilian Seow
Intracorp Projects Ltd.
British Columbia, Canada
Question: Which of the following cumulative measure indicates that your project is about 9% under budget.
A. AC=100, EV=110.
B. AC=110, EV=100.
The answer is A, and answer formula is CV = EV-AC. Why?
Saving Changes...
|
|
|
|
Sort By:
|
Rami Kaibni
 Community Champion
Senior Projects Manager | Field & Marten Associates
New Westminster, British Columbia, Canada
Lilian
"A" is a correct answer and below is my rationale:
AC = Actual Cost of Work Performed (ACWP)
EV = Budgeted Cost of Work Performed (BCWP)
There are two ways you can go about this:
Cost Variance (CV)
1) CV = EV - AC = +10 (A positive CV means you are under budget)
2) Your Budget for work performed is $110 and your variance is +10 so 10 / 110 = 0.09 = +9% (Which means you are 9% under budget)
Cost Performance Index (CPI)
CPI = EV / AC = 110 / 11 = 1.1 (Above 1 means you are perforing well and you are below budget).
This number also means that for every dollar you are spending, you are getting 1.1 back which means you are saving 9%.
Hope this helps
RMK
Saving Changes...
|
Lilian Seow
Intracorp Projects Ltd.
British Columbia, Canada
Thank you Rami.
I see it now.
Apr 26, 2021 12:09 AM
Rami Kaibni
...
You're welcome Lilian !
Saving Changes...
|
Rami Kaibni
Community Champion
Senior Projects Manager | Field & Marten Associates
New Westminster, British Columbia, Canada
Apr 26, 2021 12:00 AM
Replying to Lilian Seow
...
Thank you Rami.
I see it now.
You're welcome Lilian !
Saving Changes...
|
Rami answered your question correctly.
Saving Changes...
|
|
Please login or join to reply
|
"It's no coincidence that in no known language does the phrase "As pretty as an airport" appear."
- Douglas Adams
|
