CAPM Practice Question: Project Management Fundamentals and Core Concepts
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?
⚠ Common exam trap
CAPM often tests the direction of CPI/SPI interpretation, so candidates confuse 'greater than 1 is good' across both indices and misread 0.8 as under budget.
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
✓
The project is over budget and ahead of schedule.
CPI is calculated as EV/AC; a CPI of 0.8 means every dollar spent yields only $0.80 of earned value, indicating the project is over budget. SPI is EV/PV; an SPI of 1.2 means the project is progressing faster than planned, indicating it is ahead of schedule. Therefore, the project is over budget and ahead of schedule.
Answer analysis
Option-by-option breakdown
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
A CPI of 0.8 means cost efficiency is below 1.0, so the project is over budget, but an SPI of 1.2 means schedule efficiency exceeds 1.0, so the project is ahead of schedule, not behind. The option correctly identifies the cost position but misreads the schedule index.
- ✗
The project is under budget and behind schedule.
Why it's wrong here
CPI below 1.0 means costs exceed value earned, so the project is over budget; SPI above 1.0 means ahead of schedule. This option reverses the cost interpretation. Reading CPI as favourable is tempting because 0.8 looks like a healthy ratio, but indices below 1.0 always signal adverse performance.
- ✓
The project is over budget and ahead of schedule.
Why this is correct
CPI of 0.8 means every unit of currency returns only 0.8 of planned value, so costs exceed the budget baseline. SPI of 1.2 means earned value outpaces planned value, so work is progressing faster than the schedule baseline. Both indices are measured against the same earned value baseline.
- ✗
The project is on budget and on schedule.
Why it's wrong here
A CPI of 0.8 indicates the project is over budget, and an SPI of 1.2 indicates it is ahead of schedule, so neither index equals 1.0. On budget and on schedule would require both CPI and SPI to equal exactly 1.0.
Go deeper
Related to this question
About these practice questions
Courseiva writes every CAPM question from scratch — 451 in total, each with an explanation and a wrong-answer breakdown. None are copied from real exams or dumps. Learn why practice questions differ from exam dumps →
Same concept, more angles
1 more way this is tested on CAPM
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)?
easy- ✓ A.0.83
- B.0.91
- C.1.20
- D.1.10
Why A: CPI = EV/AC = 5000/6000 = 0.83. Options B, C, and D are incorrect calculations.
JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official PMI exam blueprint
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.