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PK0-005 Practice Question: A project has a budget at completion (BAC) of…
A project has a budget at completion (BAC) of $200,000. The earned value (EV) is $100,000 and the actual cost (AC) is $120,000. If the cost performance is expected to continue, what is the estimate at completion (EAC)?
⚠ Common exam trap
Watch out — candidates often confuse the EAC formula for continued cost performance with the formula for atypical variances (EAC = AC + (BAC - EV)), leading them to incorrectly select $220,000.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
$240,000
The estimate at completion (EAC) when cost performance is expected to continue is calculated using the formula EAC = BAC / CPI, where CPI = EV / AC. Here, CPI = $100,000 / $120,000 = 0.8333, so EAC = $200,000 / 0.8333 = $240,000. This formula assumes the same cost efficiency will persist for the remainder of the project.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
$240,000
Why this is correct
With cost performance expected to continue, EAC equals BAC divided by CPI. Here CPI is EV/AC = $100,000/$120,000 = 0.8333, so EAC = $200,000 ÷ 0.8333 = $240,000. This satisfies the stem's assumption that current cost inefficiency persists to completion.
- ✗
$200,000
Why it's wrong here
This equals the BAC, which applies only when remaining work is performed at the planned rate. Here the cost performance index is 100,000 divided by 120,000, so spending is running over budget and the forecast must exceed BAC rather than match it.
- ✗
$220,000
Why it's wrong here
This adds the cost variance to BAC, a bottom-up correction that assumes remaining work returns to plan. The stem states the current cost performance continues, so the CPI of 0.833 must divide into the remaining budget, giving 240,000 rather than this figure.
- ✗
$180,000
Why it's wrong here
This subtracts the cost variance from BAC, treating the overspend as recoverable. With cost performance expected to continue, the CPI of 0.833 applies to all remaining work, producing an EAC of 240,000; no formula yields a figure below BAC in this scenario.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This PK0-005 practice question is part of Courseiva's free CompTIA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PK0-005 exam.