Free PMI Project Management Professional (PMP) Practice Question
A project has a Budget at Completion (BAC) of $500,000. The actual cost incurred so far is $200,000, and the Earned Value (EV) is calculated to be $250,000. What is the Cost Performance Index (CPI) for this project?
The Cost Performance Index (CPI) is a measure of the cost efficiency of the project. It is calculated by dividing the Earned Value (EV) by the Actual Cost (AC). In this case, CPI = EV / AC = $250,000 / $200,000 = 1.25. A CPI greater than 1 indicates that the project is performing well cost-wise, meaning it is under budget.
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