## EVM Hangout : Question 3

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saket
Posts: 3113
Joined: Sat Dec 07, 2013 10:37 pm

### EVM Hangout : Question 3

You are the project manager for a engineering project. Your sponsor has asked you for a forecast for the cost of project completion. The project has a total budget of \$90,000 and CPI of .95. The project has spent \$35,000 of its budget so far. How much more money do you plan to spend on the project?
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kshitij_y
PMP
Posts: 229
Joined: Wed Dec 11, 2013 9:39 am

### Re: EVM Hangout : Question 3

EAC = ?
BAC = 90,000
CPI=0.95
AC= 35000
EV= 33250

EAC = AC + (BAC-EV)/CPI. eg. (Actual cost + (Planned value - Earned Value))

Ans.1 = BAC / CPI = 94737

Ans.2 = AC + (BAC-EV)/CPI
= 35000 + (90000-33250) / 0.95
= 96579

Update me which is right answer i have to select or where i am wrong
saket
Posts: 3113
Joined: Sat Dec 07, 2013 10:37 pm

### Re: EVM Hangout : Question 3

Both the formula gives the same result since in both cases you are assuming that trend is going to be continued

CPI = EV / AC
EV = CPI * AC
EV = 33250

EAC = AC + (BAC-EV)/CPI
EAC = 35000 + (90000-33250) / 0.95
EAC = 35,000 + 56750/.95
EAC = 35,000+ 59736.84
EAC = 94736.84
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kshitij_y
PMP
Posts: 229
Joined: Wed Dec 11, 2013 9:39 am

### Re: EVM Hangout : Question 3

Dear Saket

In you viedeo both the formula are described as same

EAC = BAC / CPI
EAC = AC + (BAC-EV)/CPI

saket
Posts: 3113
Joined: Sat Dec 07, 2013 10:37 pm

### Re: EVM Hangout : Question 3

Lets solve it...

EAC = AC + (BAC-EV)/CPI

EAC = AC + BAC/ CPI - EV/ CPI

EAC = AC +BAC/CPI - AC (Since EV / CPI = AC... EV/EV/AC)

EAC = BAC/CPI

That is why both are same...
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kshitij_y
PMP
Posts: 229
Joined: Wed Dec 11, 2013 9:39 am

### Re: EVM Hangout : Question 3

Dear Saket

Thanks

Actually i was doing this formula as

(AC + (BAC-EV))/CPI

which should be AC + ((BAC-EV)/CPI)

Now my both the answers are right