Quick Answer
The answer is that the project is over budget and ahead of schedule. This interpretation comes directly from earned value management CPI and SPI interpretation: a Cost Performance Index below 1.0, like 0.8, means the project is spending more than planned for the work completed, indicating a cost overrun, while a Schedule Performance Index above 1.0, like 1.2, means more work has been completed than planned, indicating the project is ahead of schedule. On the Certified Associate in Project Management CAPM exam, this concept tests your ability to read performance indices without calculation—a common trap is mixing up the direction of the indices, such as thinking a CPI below 1 means under budget. A reliable memory tip is to remember that “less than 1 is less than good” for both indices: CPI below 1 means cost is less favorable (over budget), and SPI below 1 means schedule is less favorable (behind schedule); conversely, above 1 means better than planned.
This CAPM practice question tests your understanding of project management fundamentals and core concepts. 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.
In earned value management, if the Cost Performance Index (CPI) is 0.8 and the Schedule Performance Index (SPI) is 1.2, what does this indicate?
The project is over budget and behind schedule.
Why wrong: SPI>1 indicates ahead of schedule.
The project is under budget and behind schedule.
Why wrong: CPI<1 means over budget, SPI>1 means ahead of schedule.
The project is over budget and ahead of schedule.
CPI=0.8 means over budget, SPI=1.2 means ahead of schedule.
The project is on budget and on schedule.
Why wrong: CPI and SPI should be 1.0.
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 ahead of schedule.
Option D is correct because a CPI less than 1 indicates cost overrun, and an SPI greater than 1 indicates ahead of schedule. Options A, B, and C describe incorrect combinations.
Key principle: NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
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 and behind schedule.
Why it's wrong here
SPI>1 indicates ahead of schedule.
The project is under budget and behind schedule.
Why it's wrong here
CPI<1 means over budget, SPI>1 means ahead of schedule.
The project is over budget and ahead of schedule.
Why this is correct
CPI=0.8 means over budget, SPI=1.2 means ahead of schedule.
Related concept
Static NAT maps one inside address to one outside address.
The project is on budget and on schedule.
Why it's wrong here
CPI and SPI should be 1.0.
Common exam traps
NAT is not only about the public address. The inside/outside interface roles and the ACL or rule that matches traffic are just as important.
Detailed technical explanation
NAT questions usually test address translation, overload/PAT behaviour, static mappings and whether the right traffic is being translated. Read the interface direction and address terms carefully.
Key takeaway
NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
Real-world example
A small business has 20 workstations on the 192.168.1.0/24 network and one public IP from its ISP. The router uses PAT (NAT overload) so all 20 devices share one public address using different source ports. NAT questions test whether you understand the four address terms and which direction each translation applies.
What to study next
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related CAPM NAT questions on configuration and troubleshooting.
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FAQ
Project Management Fundamentals and Core Concepts — This question tests Project Management Fundamentals and Core Concepts — Static NAT maps one inside address to one outside address..
The correct answer is: The project is over budget and ahead of schedule. — Option D is correct because a CPI less than 1 indicates cost overrun, and an SPI greater than 1 indicates ahead of schedule. Options A, B, and C describe incorrect combinations.
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related CAPM NAT questions on configuration and troubleshooting.
Static NAT maps one inside address to one outside address.
About these practice questions
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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. Refer to the exhibit. What is the cost performance index (CPI)?
easyWhy A: Option C is correct. CPI = EV/AC = 5000/6000 = 0.83. Options A, B, and D are incorrect calculations.
Last reviewed: Jun 24, 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.
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