Quick Answer
The answer is that the project is behind schedule and over budget. This conclusion is reached by calculating the Schedule Performance Index (SPI) as EV/PV, which equals 400,000/500,000 or 0.8, indicating work is progressing at only 80% of the planned rate, and the Cost Performance Index (CPI) as EV/AC, which equals 400,000/480,000 or approximately 0.83, meaning costs are exceeding the budgeted value of work performed. On the Project Management Professional PMP exam, this earned value analysis scenario tests your ability to interpret SPI and CPI values below 1.0 as negative performance indicators, a common trap where test-takers confuse the direction of the indices. A reliable memory tip is to remember that both SPI and CPI should be above 1.0 for a healthy project; if either is below 1.0, the project is in trouble—SPI below 1.0 means behind schedule, CPI below 1.0 means over budget.
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 a construction project with a fixed price contract. At the 40% progress point, earned value (EV) is $400,000, actual cost (AC) is $480,000, and planned value (PV) is $500,000. What does this indicate?
The project is behind schedule and over budget
SPI<1 and CPI<1 indicate schedule delay and cost overrun.
The project is ahead of schedule and under budget
Why wrong: Both metrics are unfavorable.
The project is behind schedule but under budget
Why wrong: CPI<1 indicates over budget, not under.
The project is ahead of schedule but over budget
Why wrong: SPI<1 indicates behind schedule, not ahead.
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 behind schedule and over budget
Option A is correct because SPI = EV/PV = 400,000/500,000 = 0.8 (behind schedule), and CPI = EV/AC = 400,000/480,000 ≈ 0.83 (over budget). Options B and C have incorrect calculations. Option D is opposite.
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.
The project is behind schedule and over budget
Why this is correct
SPI<1 and CPI<1 indicate schedule delay and cost overrun.
Related concept
Read the scenario before looking for a memorised answer.
The project is ahead of schedule and under budget
Why it's wrong here
Both metrics are unfavorable.
The project is behind schedule but under budget
Why it's wrong here
CPI<1 indicates over budget, not under.
The project is ahead of schedule but over budget
Why it's wrong here
SPI<1 indicates behind schedule, not ahead.
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.
Process — Managing Technical Aspects — study guide chapter
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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: The project is behind schedule and over budget — Option A is correct because SPI = EV/PV = 400,000/500,000 = 0.8 (behind schedule), and CPI = EV/AC = 400,000/480,000 ≈ 0.83 (over budget). Options B and C have incorrect calculations. Option D is opposite.
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.
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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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