PMI CAPM (Certified Associate in Project Management) Examination Content OutlinePredictive, Plan-Based MethodologiesMedium
A project manager is reviewing the project's performance. The project has a Budget at Completion (BAC) of $500,000. The Earned Value (EV) is $250,000, and the Actual Cost (AC) is $300,000. What is the Estimate at Completion (EAC) if the project manager believes that future work will be performed at the planned rate?
- A$600,000
- B$650,000
- C$700,000
- D$550,000
Show answer & explanationAnswer & explanation
Correct answer: D. $550,000
If future work is performed at the planned rate, the formula for EAC is AC + (BAC - EV). Plugging in the values: $300,000 + ($500,000 - $250,000) = $300,000 + $250,000 = $550,000.
Why the other options are wrong
- A. Incorrect calculation, possibly using a different EAC formula or miscalculation.
- B. Incorrect calculation, possibly using a different EAC formula or miscalculation.
- C. Incorrect calculation, possibly using a different EAC formula or miscalculation.
Estimate at Completion (EAC)
The expected total cost of completing all work on a project or work package.
- Calculated based on project performance to date and assumptions about future performance.
- Different formulas exist depending on assumptions about future performance.
- Provides a forecast for the total project cost.
Memory trick: EAC: Estimate how much money you'll need to Finish (BAC) based on how you're doing (EV, AC).