calculating costs (chapter 4, 3.2)

Question 1

define EVA?

Answer 1

-earned value analysis

-measures how much work has been completed, how much it costs to complete, and whether that cost was the same as what was budgeted.
-also helps estimate how much work still needs to be completed and estimates the cost to complete

Question 2

what are the 4 elements of EVA?

Answer 2

-Planned Value (PV)
-Earned Value (EV)
-Actual Cost (AC)
-Budget at Completion (BAC)

Question 3

define planned value (PV)

Answer 3

The work scheduled and budget authorized to accomplish that work

project has 500,000 budget and month 6 represents 50% of the project work, PV for that month is $250,000

Question 4

what is earned value (EV)

Answer 4

the physical work completed to date and the authorized budget for that work

project has budget of 500,000 and work completed is 45% of entire project work, its EV is 225,000.

EV = % complete x BAC

Question 5

what is actual cost and equation (AC)

Answer 5

the actual amount of money the project has required to date

• your BAC is 500,000 and your earned value is 225,000. your team had some waste, and spent 232,000 to get to 45%. your actual cost (AC) is 232,000

Question 6

what is Budget at completion (BAC)

Answer 6

total budget or cost allocated to complete the project or project phase.
-set during the project planning phase and can be compared to actual cost to determine financial performance.

Question 7

equation for planned value

Answer 7

PV = % complete of where the project should be

Please

Question 8

equation for earned value

Answer 8

EV = % complete x budget at completion

Eat

Question 9

equation for cost variance

Answer 9

CV = EV - AC

Carl’s

Question 10

equation for schedule variance

Answer 10

SV = EV - PV

Sugar

Question 11

equation for cost performance index

Answer 11

CPI = EV / AC

Candy

Question 12

equation for schedule performance index

Answer 12

SPI = EV / PV

S

Question 13

equation for estimate at completion

Answer 13

EAC = BAC / CPI

E

Question 14

equation for estimate to complete

Answer 14

ETC = EAC - AC

E

Question 15

equation for to-complete performance index (BAC)

Answer 15

(BAC - EV) / (BAC - AC)

The

Question 16

equation for to-complete performance index (EAC)

Answer 16

(BAC - EV) / (EAC - AC)

Taffy

Question 17

equation for variance at completion

Answer 17

VAC = BAC - EAC

Violin

Question 18

what is EVA?

Answer 18

earned value analysis, done by the pm at various points in the project cycle

Question 19

what are 2 outcomes from eva and what do they do?

Answer 19

variances and performance index

-variances calculated by subtracting AC or PV from EV
-Performance indexes divide EV by AC or PV
-used to estimate project completion time and cost

Question 20

correlation between schedule variance and cost variance?

Answer 20

cost deals with actual costs, schedule deals with planned value

Question 21

what is SPI and what does it do?

Answer 21

Schedule performance index

-measure of how close project is to performing as scheduled
-ahead of schedule = EV will be greater than PV, SPI will be greater than 1
-SPI below 1 indicates amount of work performed was less than scheduled

SPI = EV / PV

Question 22

what is CPI and what does it do?

Answer 22

Cost performance index

-measure of how close current project spending is to planned project spending
-spending less on the work performed than was budgeted, CPI will be greater than 1.
-SPending more than was budgeted, CPI will be less than 1

CPI = EV / AC