ITPEC FE Subject A April 2025 Question 41

The budgeted value of the work actually completed — earned value measures progress in the currency of the budget, not in money spent.

Earned value management (EVM) tracks three figures for the same point in time:

• •PV (planned value): the authorized budget for the work scheduled so far
• •EV (earned value): the authorized budget for the work actually completed so far
• •AC (actual cost): the money really spent on the completed work

Comparing them gives the variances and indices: CV = EV − AC, SV = EV − PV, CPI = EV ÷ AC, SPI = EV ÷ PV.

Answer (a)

Why not others:

• •(b) — a time-phased budget for the total cost of the project is the cost baseline (the performance measurement baseline, totalling BAC), not EV
• •(c) — the authorized budget for the planned work is planned value (PV)
• •(d) — the cost actually incurred for the work performed in a period is actual cost (AC)

Key rule: PV is budget for what was planned, EV is budget for what was done, AC is money spent on what was done; EV is the common term in both the cost and the schedule comparison.

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