Question 405 of 892

Process — Managing Technical Aspects →mediumMultiple ChoiceObjective-mapped

PMP Process — Managing Technical Aspects Practice Question

This PMP practice question tests your understanding of process — managing technical aspects. 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.

Your project is 40% complete, and the earned value analysis shows CPI = 0.85 and SPI = 0.90. The project sponsor is concerned about the cost overrun. The original budget at completion (BAC) is $1,000,000. What is the Estimate at Completion (EAC) using the typical cost performance index (CPI) assumption?

A
$850,000
Why wrong: This incorrectly applies the CPI as a multiplier to BAC instead of dividing.
B
$1,000,000
Why wrong: This ignores the cost overrun; the project is over budget so EAC should be higher than BAC.
C
$1,111,111
Why wrong: This would be BAC / SPI = $1,000,000 / 0.90, but SPI is not used for cost forecasting.
D
$1,176,471
EAC = BAC / CPI = $1,000,000 / 0.85 ≈ $1,176,471, assuming current cost performance is typical.

Full breakdown with real-world context →

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

✓

$1,176,471

The typical CPI assumption means the cost performance to date will continue for the remainder of the project. The formula is EAC = BAC / CPI = $1,000,000 / 0.85 = $1,176,470.59, which rounds to $1,176,471. This assumes the same efficiency (CPI) for the remaining work, reflecting the current cost overrun trend.

Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.

Answer analysis

Option-by-option breakdown

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

✗
$850,000
Why it's wrong here
This incorrectly applies the CPI as a multiplier to BAC instead of dividing.
✗
$1,000,000
Why it's wrong here
This ignores the cost overrun; the project is over budget so EAC should be higher than BAC.
✗
$1,111,111
Why it's wrong here
This would be BAC / SPI = $1,000,000 / 0.90, but SPI is not used for cost forecasting.
✓
$1,176,471
Why this is correct
EAC = BAC / CPI = $1,000,000 / 0.85 ≈ $1,176,471, assuming current cost performance is typical.
Related concept
Read the scenario before looking for a memorised answer.

Common exam traps

Common exam trap: answer the scenario, not the keyword

The trap here is that candidates often confuse the EAC formula using CPI (BAC / CPI) with the formula using SPI (BAC / SPI) or incorrectly multiply BAC by CPI, leading to wrong answers like $1,111,111 or $850,000.

Detailed technical explanation

How to think about this question

The EAC formula under the typical CPI assumption (EAC = BAC / CPI) is used when the project manager expects the current cost efficiency to persist for the remaining work. This is a common assumption in EVM when variances are not expected to be corrected. In real-world scenarios, this might occur due to systemic issues like supplier price increases or labor inefficiencies that are unlikely to change. The CPI of 0.85 indicates the project is only earning $0.85 of value for every $1 spent, so the total cost at completion will be higher than the original budget.

KKey Concepts to Remember

Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.

TExam Day Tips

Watch for words such as best, first, most likely and least administrative effort.
Review why wrong options are wrong, not only why the correct option is correct.

Key takeaway

Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.

Real-world example

How this comes up in practice

A practitioner preparing for the PMP 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

Got this wrong? Here's your next step.

Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.

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FAQ

Questions learners often ask

What does this PMP question test?

Process — Managing Technical Aspects — This question tests Process — Managing Technical Aspects — Read the scenario before looking for a memorised answer..

What is the correct answer to this question?

The correct answer is: $1,176,471 — The typical CPI assumption means the cost performance to date will continue for the remainder of the project. The formula is EAC = BAC / CPI = $1,000,000 / 0.85 = $1,176,470.59, which rounds to $1,176,471. This assumes the same efficiency (CPI) for the remaining work, reflecting the current cost overrun trend.

What should I do if I get this PMP question wrong?

Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.

What is the key concept behind this question?

Read the scenario before looking for a memorised answer.

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