ITPEC FE Morning April 2019 Question 53
ITPEC FE Morning April 2019 — Question 53 of 80
Earned Value — Estimate to Complete (ETC) — calculating remaining project cost using CPI
Given: BAC = $100,000, AC = $60,000, 40% work completed.
- •EV (Earned Value) = 40% × BAC = $40,000
- •CPI (Cost Performance Index) = EV / AC = 40,000 / 60,000 = 2/3
- •ETC (Estimate to Complete) = (BAC − EV) / CPI = 60,000 / (2/3) = $90,000
The correct answer is c) 90,000.
Why not others:
- a) 40,000 — this is just BAC − AC (remaining budget), ignoring the cost overrun
- b) 60,000 — this is BAC − EV (remaining work value) without adjusting for CPI
- d) 150,000 — this is EAC (Estimate at Completion = AC + ETC), but the question asks for remaining cost only
Key rule: ETC = (BAC − EV) / CPI. When CPI stays the same, divide remaining work value by CPI to account for the spending inefficiency. Watch whether the question asks for ETC (remaining) or EAC (total).
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