EAC formula qn

 

Can anybody help me with solving below qn with justification please?


Your project sponsor has asked you for a status report of your project, you are required to include Estimate at Completion information in the report based on the following data. What would be the EAC? 

Actual cost of the project = $ 350,000 
Budget at completion of the project = $ 500,000 
Earned value= $250,000

 

 

   

 

 

   

 

 

 

 

 


 

 

I guess if nothing is mentioned in the question about the varainces, we should consider it as TYPICAL variance.


Hence EAC = BAC / CPI


CPI = EV / AC = 250000 / 350000 = 0.714


EAC = 500000 / 0.714 = 700280.11


 


Regards,


Arun.

 700000

 

Explanation given as:

 CPI=EV/AC
= 250,000/350,000=0.714
EAC= AC + (BAC-EV)/CPI (is this a valid formula? )
= 350,000+ (500,000-250,000)/0.714
= 350,000+ (250.000)/0.714
= 700,000

 

Can you guys help me here?

 

Hi BK,


This is same as the formula which I have mentioned.


EAC = AC + (BAC-EV)/CPI is the formula that was given in PMBOK guide third edition.


In fourth edition, the same formula is simplified to EAC = BAC / CPI. Both the formulae are correct.


Kindly refer this url which clearly derives the eauation.


http://www.deepfriedbrainproject.com/2010/01/solving-estimate-at-completion-puzzle.html


 


Regards,


Arun.

 thanks..

Hi BK,

Can I have 4 options for this question?

 $ 516,000

$ 155,000

$ 700,000

$ 850,000

Fyi..

Tahnks BK

And correct ans is $700,000?

 yes