Earned Value Measurements Problems

1. When you collect the earned value data for your project, you get the following data: PV = $1,500,000, EV = $ 1,200,000, AC = $1,000,000. You expect the factors for cost variance to continue in the same way in future. The value of the remaining work is $1,000,000. What should be the new EAC for the project?

A. $2,400,000

B. $2,233,333

C. $2,000,000

D. $1,833,333

Correct Answer: D

Solution: EAC= BAC/CPI, BAC = 1,200,000+1,000,000=2,200,000. CPI = EV/AC = 1,200,000/1,000,000 = 1.2. EAC = 2,200,000/1.2 = 1,833,333

2. The latest Earned value report of the project shows CPI = 1.2, SPI = 0.8, PV = $500,000, SV = -$220,000. What is the Cost Variance of the project?

A. $486,666

B. $280,000

C. $46,666

D. $233,333

Correct Answer: C

Solution: EV= PV+SV = 500000 – 220000 = $280,000, AC = EV/CPI =280000/1.2 = $233,333. CV = EV - AC = 280000 – 233333 = $46,666

3. When you analyze earned value data for your project, you get the following information: CPI = .84, and the EV is $48,000. How much money has actually been spent on the project?

A. $40,320

B. $57,145

C. $37,654

D. There is not enough information to calculate the actual cost

Correct Answer: B

Solution: CPI = EV/AC; AC = EV/CPI = 48,000/0.84 = 57,145

4. The project is budgeted at $1,000,000. The following earned value figures have been derived. PV=$500,000, EV = $450,000, AC= $550,000. The cost variances in the project are caused by one-time factors which are no more effective. What will be the estimate at completion for the project?

A. $1,000,000

B. $1,100,000

C. $900,000

D. $1,222,222

Correct answer: B

Solution: When the cost variance caused is one time and not expected to continue (the future work will be accomplished at the planned rate), EAC= AC+BAC-EV. EAC = 550000 + 1000000 – 450000 = 1,100,000

5. The earned value data for a project has been derived as below. PV=$400,000, EV=$400,000, AC =$600,000. What is the burn rate of the project?

A. 0.66

B. 1

C. 1.6

D. 1.5

Correct Answer: D

Solution: Burn rate is 1/CPI. CPI = EV/AC = 400000/600000 = 0.6666... Burn rate = 1/0.66666 = 1.5

6. You are managing a telecommunications project. The project is expected to be completed in 10 months at a cost of $12000 per month. After 2 months, you realize that the project is 30% completed at a cost of $60,000. What are the Earned Value (EV) and the Cost Variance (CV)?

A. EV = ($16,000); CV= $26,000

B. EV = $16,000; CV= ($20,000)

C. EV = $36,000 ; CV= $24,000

D. EV = $36,000; CV= ($24,000)

Correct Answer: D

Solution: BAC=12000*10 = 120000, EV=30%*120000=36000, CV= EV - AC = 36000 - 60000 = -24000

7. You are managing a constructions project. You have completed half the project work. The total planned cost at this stage is $1000. The actual work that has been completed at this stage is worth $1200. You have spent $1500 already on the project. What is the CPI?

A. 0.5

B. 0.8

C. 4

D. 1.25

Correct Answer: B

Solution: CPI = EV/AC = 1200/ 1500 = 0.8

8. A software development project that you are managing has budget at completion of $400,000. At month seven, 65% of the work was planned to be complete but stands at 50%. Actual cost is $275,000. What is the project's ETC?

A. $55,000

B. $389,855

C. $289,000

D. $275,000

Correct Answer: D

Solution: CPI = 50% *400000/ 275000 = 0.72 EAC = BAC/CPI = 400000/0.72 = 550000. ETC = EAC – AC = 550000-275000= 275000

9. You perform an earned value analysis for your project, resulting in the following numbers:

EV: 354,000; PV: 454,000; AC: 474,000. Which results are correct?

A. CV: +120,000; SV: +100,000

B. CV: +100,000; SV: +120,000

C. CV: -100,000; SV: -120,000

D. CV: -120,000; SV: -100,000

Correct Answer: D

Solution: CV = EV – AC = 354,000 – 474,000 = -120,000;

SV = EV – PV = 354,000 – 454,000 = -100,000

10. During your project analysis, you understand that there is a cost-variance in the project. Further analysis shows that it is a one-time variance caused by an unexpected rework. You do not expect such situation in future. You would like to get the Estimate at completion for your project, so you perform earned value analysis and get the following data: EV = 2,000,000; PV = 1,500,000; AC = 2,500,000; BAC = 4,000,000. What is EAC?

A. 4,500,000

B. 5,000,000

C. 4,000,000

D. 5,500,000

Correct Answer: A

Solution: When the variations are one-time, then EAC = AC+BAC-EV = 2,500,000 + 4,000,000 – 2,000,000 = 4,500,000

1. When you collect the earned value data for your project, you get the following data: PV = $1,500,000, EV = $ 1,200,000, AC = $1,000,000. You expect the factors for cost variance to continue in the same way in future. The value of the remaining work is $1,000,000. What should be the new EAC for the project?

A. $2,400,000

B. $2,233,333

C. $2,000,000

D. $1,833,333

Correct Answer: D

Solution: EAC= BAC/CPI, BAC = 1,200,000+1,000,000=2,200,000. CPI = EV/AC = 1,200,000/1,000,000 = 1.2. EAC = 2,200,000/1.2 = 1,833,333

2. The latest Earned value report of the project shows CPI = 1.2, SPI = 0.8, PV = $500,000, SV = -$220,000. What is the Cost Variance of the project?

A. $486,666

B. $280,000

C. $46,666

D. $233,333

Correct Answer: C

Solution: EV= PV+SV = 500000 – 220000 = $280,000, AC = EV/CPI =280000/1.2 = $233,333. CV = EV - AC = 280000 – 233333 = $46,666

3. When you analyze earned value data for your project, you get the following information: CPI = .84, and the EV is $48,000. How much money has actually been spent on the project?

A. $40,320

B. $57,145

C. $37,654

D. There is not enough information to calculate the actual cost

Correct Answer: B

Solution: CPI = EV/AC; AC = EV/CPI = 48,000/0.84 = 57,145

4. The project is budgeted at $1,000,000. The following earned value figures have been derived. PV=$500,000, EV = $450,000, AC= $550,000. The cost variances in the project are caused by one-time factors which are no more effective. What will be the estimate at completion for the project?

A. $1,000,000

B. $1,100,000

C. $900,000

D. $1,222,222

Correct answer: B

Solution: When the cost variance caused is one time and not expected to continue (the future work will be accomplished at the planned rate), EAC= AC+BAC-EV. EAC = 550000 + 1000000 – 450000 = 1,100,000

5. The earned value data for a project has been derived as below. PV=$400,000, EV=$400,000, AC =$600,000. What is the burn rate of the project?

A. 0.66

B. 1

C. 1.6

D. 1.5

Correct Answer: D

Solution: Burn rate is 1/CPI. CPI = EV/AC = 400000/600000 = 0.6666... Burn rate = 1/0.66666 = 1.5

6. You are managing a telecommunications project. The project is expected to be completed in 10 months at a cost of $12000 per month. After 2 months, you realize that the project is 30% completed at a cost of $60,000. What are the Earned Value (EV) and the Cost Variance (CV)?

A. EV = ($16,000); CV= $26,000

B. EV = $16,000; CV= ($20,000)

C. EV = $36,000 ; CV= $24,000

D. EV = $36,000; CV= ($24,000)

Correct Answer: D

Solution: BAC=12000*10 = 120000, EV=30%*120000=36000, CV= EV - AC = 36000 - 60000 = -24000

7. You are managing a constructions project. You have completed half the project work. The total planned cost at this stage is $1000. The actual work that has been completed at this stage is worth $1200. You have spent $1500 already on the project. What is the CPI?

A. 0.5

B. 0.8

C. 4

D. 1.25

Correct Answer: B

Solution: CPI = EV/AC = 1200/ 1500 = 0.8

8. A software development project that you are managing has budget at completion of $400,000. At month seven, 65% of the work was planned to be complete but stands at 50%. Actual cost is $275,000. What is the project's ETC?

A. $55,000

B. $389,855

C. $289,000

D. $275,000

Correct Answer: D

Solution: CPI = 50% *400000/ 275000 = 0.72 EAC = BAC/CPI = 400000/0.72 = 550000. ETC = EAC – AC = 550000-275000= 275000

9. You perform an earned value analysis for your project, resulting in the following numbers:

EV: 354,000; PV: 454,000; AC: 474,000. Which results are correct?

A. CV: +120,000; SV: +100,000

B. CV: +100,000; SV: +120,000

C. CV: -100,000; SV: -120,000

D. CV: -120,000; SV: -100,000

Correct Answer: D

Solution: CV = EV – AC = 354,000 – 474,000 = -120,000;

SV = EV – PV = 354,000 – 454,000 = -100,000

10. During your project analysis, you understand that there is a cost-variance in the project. Further analysis shows that it is a one-time variance caused by an unexpected rework. You do not expect such situation in future. You would like to get the Estimate at completion for your project, so you perform earned value analysis and get the following data: EV = 2,000,000; PV = 1,500,000; AC = 2,500,000; BAC = 4,000,000. What is EAC?

A. 4,500,000

B. 5,000,000

C. 4,000,000

D. 5,500,000

Correct Answer: A

Solution: When the variations are one-time, then EAC = AC+BAC-EV = 2,500,000 + 4,000,000 – 2,000,000 = 4,500,000