Free PMI Project Management Professional (PMP) Practice Question
When using Earned Value Management (EVM), the formula EAC = BAC / CPI is used to calculate the Estimate at Completion (EAC) assuming the current performance trend will continue for the remainder of the project.
The statement is true. The formula EAC = BAC / CPI is used in Earned Value Management to calculate the Estimate at Completion when assuming the current performance trend will continue. EAC represents the expected total cost at completion, BAC is the original total budget, and CPI is the Cost Performance Index. This formula projects the current cost efficiency to the end of the project. If CPI < 1, the project is over budget, and EAC will exceed BAC. If CPI > 1, the project is under budget, and EAC will be less than BAC. While this is a common EAC formula, others may be used in different scenarios, such as when future performance is expected to differ from past performance.
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What is the Cost Performance Index (CPI)?
What does BAC stand for in project management, and how is it determined?
How does the Estimate at Completion (EAC) differ from the Budget at Completion (BAC)?
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PMI Project Management Professional (PMP) /
Process
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