PMP Formulas Flashcards
AC (Actual Cost)
ACWP (Actual Cost of Work Performed)
Definitive Estimate?
-5% to +10%
Variance (= s2))?
Variance = ((P-O)/6)^2
Internal Rate of Return (IRR)?
Net Investment / Avg. Annual Cash Flow.
Higher is better. Also called Hurdle Rate
Expected Monetary Value?
Probability * Impact
Schedule Performance Index (SPI)?
SPI = EV / PV
Less than 1 is behind schedule
Budget Estimate?
-10% to +25%
Communication Channel?
n(n-1)/2
Working Capital?
Current Assets - Current Liabilities
% Communication of a PM?
90%
Benefit Cost Ratio?
Benefit / Cost
(Higher is better, >1 has benefit)
Exam can call it Cost-Benefit Ratio, where lower is better.
PERT Mean Estimate?
PERT=(P+4m+O)/6 3 estimates for each task: . P: Pessimistic . M: Most Likely . O: Optimistic
Return on Assets (ROA)?
NEBT / Total Assets
OR
NEAT / Totals Assets
Sigma (o)?
1o = 68.27% 2o = 95.45% 3o = 99.73% 6o = 99.99985%
Rough Order of Magnitude (ROM)?
-25% to +75%
-50 to +100%
Arrow Diagramming Method (ADM)?
Also called Activity on Arrow (AOA)
Only 1 relationship: F-S
Can have “dummies”
Can analyze using either Three-Point Estimates or CPM
Scheduled Variance (SV)?
SV = EV - PV
Minus is behind schedule
GERT?
Allows loops and repetitive activities
Expected Monetary Value?
Probability * Impact
Variance at Completion (VAR)?
VAC = BAC - EAC
Budgeted Estimate?
-10% to +25%
To Complete Performance Index (TCPI)?
TCPI = (BAC - EV) / (BAC - AC)
Values for the TCPI index of less then 1.0 is good because it indicates the efficiency to complete as less than planned. How efficient must the project team be to complete the remaining work with the remaining money.
ROI (Return on Investment)?
ROI = Earnings
Investment / Higher ROI is better
Payback period?
Time to recover cost of the project.
Lower payback period is better.
Cost Variance (CV)?
CV = EV - AC
Minus is over budget.
Point of Total Assumption (PTA)?
((Ceiling Price - Target Price)/buyer’s Share Ratio) + Target Cost
Standard Deviation (=s)?
Deviation = (P-O)/6 3 estimates for each task: P: Pessimistic M: Most Likely O: Optimistic
Estimate at Completion (EAC)?
EAC = BAC/CPI Same rate of spending. EAC = AC+ETC Use when Initial Estimates are flawed EAC = AC+(BAC-EV) Use when future variances are atypical. EAC = AC +[(BAC-EV)/CPI] Use when future variances are typical.
Present Value?
PV=FV/{1+R]^n
Higher is better.
FV=Future Value
R=Interest Rate
n=number of time periodsDiscounted Cash Flow?
Cash Flow X Discount Factor
Return on Sales (ROS)?
Net Income Before Taxes (NEBT)/Total Sales
OR
Net Income After Taxes (NEAT)/Total Sales
Contract Related Formulas?
Savings = Target Cost - Actual Cost
Bonus = Savings * Percentage
Contract Cost = Bonus + Fees
Total Cost = Actual Cost + Contract Cost
Working Capital?
Current Assets - Current Liabilities
Cash Flow?
Cash Flow = Cash In - Cash Out
Slack or Float?
LS - ES: Calculates slack with forward pass Total Float (also called Slack, Float, or Project Float) is the total amount of time an activity can be delayed without delaying the project finish date. LF - EF: Calculates slack with backwards pass. Free Float Slack is the amount of time an activity can be delayed without its successor (following activity).
Cost Performance Index (CPI)?
CPI = EV / AC
Less than 1 is over budget
Precedence Diagramming Method (PDM)?
Also called Activity on Node (AON): Activities are in the boxes, arrows show the relationship.
Most commonly used today.
Has 4 relationships: F-S, S-S, F-F, S-F
No “dummies” (zero duration dependencies) allowed.
Can analyze using either Three-Point Estimates or CPM
PV (Planned Value)?
BCWS (Budgeted Cost of Work Scheduled)
