Quick Answer
The correct conclusion is that the project is over budget and behind schedule. This is determined by calculating the cost performance index (CPI) and schedule performance index (SPI), both of which fall below 1.0 when earned value (EV) is less than both actual cost (AC) and planned value (PV). Here, with 40% of work completed (EV = 0.4 × BAC) against a PV of $450,000 and an AC of $500,000, the EV is lower than PV, meaning less work was done than planned, and AC exceeds EV, meaning more was spent than the work earned—so both CPI and SPI are under 1.0. On the CAPM exam, this tests your ability to interpret EVM metrics from a predictive project scenario, a common calculation-based question. A frequent trap is confusing CPI and SPI direction: remember that a value less than 1.0 always signals trouble—CPI under 1.0 means over budget, SPI under 1.0 means behind schedule. A simple memory tip is “less than one, underdone and overrun.”
This CAPM practice question tests your understanding of predictive plan-based methodologies. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A project manager is using a predictive approach for a construction project. The team has completed 40% of the work, but the actual cost is $500,000 against a planned value of $450,000. The project manager calculates the cost performance index (CPI) and schedule performance index (SPI). Which conclusion is correct?
The project is over budget but ahead of schedule
Why wrong: SPI < 1 indicates behind schedule, not ahead.
The project is on budget and on schedule
Why wrong: Both indices are less than 1, so not on track.
The project is under budget and ahead of schedule
Why wrong: CPI < 1 indicates over budget, not under budget.
The project is over budget and behind schedule
CPI < 1 (over budget) and SPI < 1 (behind schedule).
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
The project is over budget and behind schedule
The project has completed 40% of the work, so the earned value (EV) is 40% of the total budget. With actual cost (AC) of $500,000 and planned value (PV) of $450,000, the CPI = EV/AC = (0.4 * BAC)/500,000. Since AC > PV and EV < PV (because only 40% of work is done vs. 45% planned), both CPI and SPI are less than 1.0, indicating the project is over budget and behind schedule.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
The project is over budget but ahead of schedule
Why it's wrong here
SPI < 1 indicates behind schedule, not ahead.
The project is on budget and on schedule
Why it's wrong here
Both indices are less than 1, so not on track.
The project is under budget and ahead of schedule
Why it's wrong here
CPI < 1 indicates over budget, not under budget.
The project is over budget and behind schedule
Why this is correct
CPI < 1 (over budget) and SPI < 1 (behind schedule).
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
The trap here is that candidates often confuse planned value (PV) with earned value (EV), incorrectly assuming that because AC > PV, the project is over budget but ahead of schedule, when in fact EV must be compared to both PV and AC to determine schedule and cost performance.
Detailed technical explanation
In earned value management (EVM), CPI = EV/AC and SPI = EV/PV. With 40% completion, EV = 0.4 * BAC. If BAC is $1,000,000, EV = $400,000. Given AC = $500,000 and PV = $450,000, CPI = 0.8 (< 1, over budget) and SPI = 0.89 (< 1, behind schedule). A real-world scenario: a construction project with concrete pouring—if 40% of the foundation is done but costs exceed planned labor and materials, the project is both over budget and behind schedule, requiring corrective action like crashing or fast-tracking.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A practitioner preparing for the CAPM exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
What to study next
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Predictive Plan-Based Methodologies — study guide chapter
Learn the concepts, then practise the questions
Predictive Plan-Based Methodologies practice questions
Targeted practice on this topic area only
All CAPM questions
503 questions across all exam domains
Certified Associate in Project Management CAPM study guide
Full concept coverage aligned to exam objectives
CAPM practice test guide
How to use practice tests most effectively before exam day
Related practice questions
Use these pages to review the topic behind this question. This is how one missed question becomes focused revision.
Practise CAPM questions linked to Agile Frameworks and Methodologies.
Practise CAPM questions linked to Project Management Fundamentals and Core Concepts.
Practise CAPM questions linked to Predictive Plan-Based Methodologies.
Practise CAPM questions linked to Business Analysis Frameworks.
Practise CAPM questions linked to CAPM fundamentals.
Practise CAPM questions linked to CAPM scenario.
Practise CAPM questions linked to CAPM troubleshooting.
Practice this exam
Short sessions build daily habit. Longer sessions build exam-day stamina. Try a timed session to simulate real conditions.
FAQ
Predictive Plan-Based Methodologies — This question tests Predictive Plan-Based Methodologies — Read the scenario before looking for a memorised answer..
The correct answer is: The project is over budget and behind schedule — The project has completed 40% of the work, so the earned value (EV) is 40% of the total budget. With actual cost (AC) of $500,000 and planned value (PV) of $450,000, the CPI = EV/AC = (0.4 * BAC)/500,000. Since AC > PV and EV < PV (because only 40% of work is done vs. 45% planned), both CPI and SPI are less than 1.0, indicating the project is over budget and behind schedule.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Same concept, more angles
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A project is in the execution phase. The earned value analysis shows a Cost Performance Index (CPI) of 0.8 and a Schedule Performance Index (SPI) of 0.9. What is the best interpretation of these metrics?
mediumWhy A: Option B is correct because CPI < 1 indicates cost overrun, and SPI < 1 indicates schedule behind. Option A is wrong because it claims ahead of schedule. Option C is wrong because it claims under budget. Option D is wrong because it claims both under budget and ahead of schedule.
Keep practising
Last reviewed: Jun 11, 2026
This CAPM practice question is part of Courseiva's free PMI 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 CAPM exam.
Question Discussion
Share a tip, memory trick, or ask about the reasoning behind this question. Do not post real exam questions, leaked content, braindumps, or copyrighted exam material. Comments are moderated and may be removed without notice.
Sign in to join the discussion.