Quick Answer
The answer is $1,176,471. This is correct because the Estimate at Completion (EAC) using the typical CPI assumption is calculated by dividing the Budget at Completion (BAC) by the cumulative CPI, reflecting the expectation that the current cost efficiency will persist for the remainder of the project. On the PMP exam, this formula—EAC = BAC / CPI—tests your ability to apply earned value management when cost variances are considered non-recoverable and typical. A common trap is confusing this with the “atypical” formula (EAC = AC + (BAC – EV)), so remember: if the question says “typical” or “current CPI will continue,” use BAC divided by CPI. For memory, think “Typical = Total divided by Trend,” where the trend is the CPI.
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?
$850,000
Why wrong: This incorrectly applies the CPI as a multiplier to BAC instead of dividing.
$1,000,000
Why wrong: This ignores the cost overrun; the project is over budget so EAC should be higher than BAC.
$1,111,111
Why wrong: This would be BAC / SPI = $1,000,000 / 0.90, but SPI is not used for cost forecasting.
$1,176,471
EAC = BAC / CPI = $1,000,000 / 0.85 ≈ $1,176,471, assuming current cost performance is typical.
Answer choices
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
When the current cost performance is considered typical and expected to continue, the EAC is calculated as BAC / CPI = $1,000,000 / 0.85 ≈ $1,176,471. This is the most common formula for EAC when variances are expected to persist.
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.
$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
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: $1,176,471 — When the current cost performance is considered typical and expected to continue, the EAC is calculated as BAC / CPI = $1,000,000 / 0.85 ≈ $1,176,471. This is the most common formula for EAC when variances are expected to persist.
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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Same concept, more angles
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Variation 1. Your project is 40% complete, and the earned value analysis shows CPI = 0.85 and SPI = 0.90. The project budget is $500,000. What is the Estimate at Completion (EAC) assuming the current cost performance is expected to continue?
mediumWhy B: When current cost performance is expected to continue, EAC = BAC/CPI. BAC = $500,000, CPI = 0.85, so EAC = $500,000 / 0.85 ≈ $588,235.
Last reviewed: Jun 21, 2026
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