Quick Answer
The answer is a CPI of 0.92, which indicates the project is over budget. This is calculated by dividing the earned value (EV) of $120,000 by the actual cost (AC) of $130,000, yielding 0.92. The cost performance index measures the cost efficiency of the work completed, and any value below 1.0 means the project is spending more than planned for the value earned. On the PMP exam, this calculation tests your ability to apply earned value management (EVM) formulas quickly, often in scenario-based questions where you must interpret the result, not just compute it. A common trap is confusing CPI with SPI or misreading AC as PV; remember that CPI focuses on cost, so the denominator is always actual cost. For a quick memory tip: think of CPI as “Costs are Painful if Index is less than 1”—if it’s below 1.0, you’re in the red.
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.
A project is 60% complete. The earned value (EV) is $120,000, the planned value (PV) is $150,000, and the actual cost (AC) is $130,000. What is the cost performance index (CPI) and what does it indicate?
CPI = 0.80; the project is under budget
Why wrong: Calculation is incorrect.
CPI = 1.08; the project is under budget
Why wrong: Calculation is incorrect.
CPI = 0.92; the project is behind schedule
Why wrong: CPI measures cost efficiency, not schedule.
CPI = 0.92; the project is over budget
Correct calculation; over budget.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
CPI = 0.92; the project is over budget
CPI = EV/AC = $120,000/$130,000 = 0.92. A CPI less than 1 indicates the project is over budget.
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.
CPI = 0.80; the project is under budget
Why it's wrong here
Calculation is incorrect.
CPI = 1.08; the project is under budget
Why it's wrong here
Calculation is incorrect.
CPI = 0.92; the project is behind schedule
Why it's wrong here
CPI measures cost efficiency, not schedule.
CPI = 0.92; the project is over budget
Why this is correct
Correct calculation; over budget.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.
Detailed technical explanation
This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.
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 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
Identify which PMP exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
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FAQ
Process — Managing Technical Aspects — This question tests Process — Managing Technical Aspects — Read the scenario before looking for a memorised answer..
The correct answer is: CPI = 0.92; the project is over budget — CPI = EV/AC = $120,000/$130,000 = 0.92. A CPI less than 1 indicates the project is over budget.
Identify which PMP exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
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. Your project is 40% complete, but the Earned Value (EV) is $50,000, Planned Value (PV) is $60,000, and Actual Cost (AC) is $70,000. The cost performance index (CPI) is 0.71, and the schedule performance index (SPI) is 0.83. What is the most likely impact on the project?
mediumWhy D: Option A is correct because CPI < 1 indicates cost overrun, and SPI < 1 indicates schedule delay. Options B and C are incorrect because both cost and schedule are unfavorable. Option D is incorrect because both are negative.
Variation 2. Your project's Earned Value (EV) is $45,000, Planned Value (PV) is $50,000, and Actual Cost (AC) is $55,000. The project is at the midpoint. What is the most accurate assessment of the project's status?
mediumWhy D: Option C is correct: SPI = EV/PV = 0.9 (behind schedule), CPI = EV/AC = 0.82 (over budget). Option A incorrectly states on schedule. Option B incorrectly states on budget. Option D misstates CPI.
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Last reviewed: Jun 21, 2026
This PMP 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 PMP exam.
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