If EV = 110 and AC = 100, what is the Cost Performance Index (CPI)?

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Study for the Landini Certified Associate in Project Management Exam. Prepare with interactive flashcards and in-depth multiple-choice questions. Each question includes hints and answers. Ace your CAPM exam!

Multiple Choice

If EV = 110 and AC = 100, what is the Cost Performance Index (CPI)?

Explanation:
The Cost Performance Index measures cost efficiency by comparing earned value to actual cost. It is calculated as CPI = EV / AC. With EV of 110 and AC of 100, CPI = 110 / 100 = 1.10. A CPI above 1 indicates you’re delivering more value per dollar than planned, i.e., you’re under budget. Here, you’re getting 10% more value than you’re spending, so the CPI is 1.10. If you compare to the other options, a value below 1 would mean cost overruns, and exactly 1 would mean on-budget performance.

The Cost Performance Index measures cost efficiency by comparing earned value to actual cost. It is calculated as CPI = EV / AC. With EV of 110 and AC of 100, CPI = 110 / 100 = 1.10. A CPI above 1 indicates you’re delivering more value per dollar than planned, i.e., you’re under budget. Here, you’re getting 10% more value than you’re spending, so the CPI is 1.10. If you compare to the other options, a value below 1 would mean cost overruns, and exactly 1 would mean on-budget performance.

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