PMP Process — Managing Technical Aspects Practice Question

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

• ✗

  EAC = AC + Bottom-up ETC

  Why it's wrong here

  This formula is employed when the original budget is deemed unreliable for forecasting future costs, necessitating a fresh, detailed re-estimation of the remaining work (ETC). It implies that past cost performance is not a reliable indicator of future performance, and a bottom-up approach provides a more accurate forecast. This is typically used after significant scope changes or unforeseen events invalidate the original cost baseline, requiring a complete re-evaluation of the work yet to be done.

• ✗

  EAC = AC + (BAC - EV)

  Why it's wrong here

  This formula assumes that all future work will be completed precisely at the planned rate, effectively disregarding any cost variances incurred to date. It projects that the remaining budget (BAC - EV) is sufficient to complete the remaining scope, implying that past cost overruns or underruns were anomalies and will not continue. This is inappropriate when a consistent cost overrun trend is observed, as it fails to incorporate the established inefficiency into the final cost projection.

• ✓

  EAC = BAC / CPI

  Why this is correct

  This formula is the most appropriate choice when the project's current cost performance trend is expected to continue for the duration of the project. By dividing the Budget At Completion (BAC) by the Cost Performance Index (CPI), it extrapolates the historical cost efficiency or inefficiency across the entire project scope. Given a consistent 15% overrun, this formula accurately projects the final cost by assuming the established cost trend will persist, providing a realistic forecast.

• ✗

  EAC = BAC / (CPI * SPI)

  Why it's wrong here

  This formula integrates both cost and schedule performance indices, assuming that schedule variances will impact the cost of completing the remaining work. It is typically used when the project manager believes that schedule delays or accelerations have a direct cost implication that must be factored into the final estimate. However, since the question specifically highlights a consistent cost overrun without indicating any schedule performance issues, incorporating SPI would introduce an unwarranted assumption and potentially distort the EAC.

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