Free PMI Project Management Professional (PMP) Practice Question

The correct answer is 0.8. The Cost Performance Index (CPI) is calculated using the formula: CPI = EV / AC. In this case, CPI = $200,000 / $250,000 = 0.8.

CPI is a measure of cost efficiency, indicating how efficiently the project is using its resources. A CPI of 0.8 means that for every dollar spent, the project is earning $0.80 worth of work. This indicates that the project is over budget, as it's spending more than planned to complete the work.

It's important to note that:

• A CPI greater than 1 indicates the project is under budget.
• A CPI equal to 1 indicates the project is on budget.
• A CPI less than 1 indicates the project is over budget.

The other answers are incorrect because:

• 1.25 would indicate the project is under budget, which is not the case given the data.
• 0.5 is too low and would indicate a more severe cost overrun than what's actually occurring.
• 2.0 would suggest the project is significantly under budget, which contradicts the given information.