Free PMI Project Management Professional (PMP) Practice Question
In a project with a Budget at Completion (BAC) of $800,000 and a current Cumulative Cost Performance Index (CPI) of 0.9, the Estimate at Completion (EAC) calculated as BAC/CPI would be less than the original budget.
The statement is false. When calculating EAC using the formula EAC = BAC / CPI, if the CPI is less than 1, the EAC will always be greater than the original BAC. In this case, EAC = $800,000 / 0.9 = $888,889, which is more than the original $800,000 budget. A CPI below 1 indicates the project is over budget, so it's logical that the estimated final cost would exceed the initial budget. This calculation assumes the current cost performance trend will continue for the remainder of the project.
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