PMP Process — Managing Technical Aspects Practice Question
Your project is halfway through its schedule. Earned value analysis shows: EV = $120,000, PV = $150,000, AC = $140,000. What is the best interpretation of the project's performance?
⚠ Common exam trap
A common mix-up: candidates confuse Actual Cost (AC) with Planned Value (PV), incorrectly assuming that if AC is less than PV, the project is under budget, ignoring that EV must be compared to AC for cost performance.
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
✓
The project is behind schedule and over budget.
The project is behind schedule because the Earned Value (EV) of $120,000 is less than the Planned Value (PV) of $150,000, resulting in a Schedule Performance Index (SPI) of 0.8. The project is over budget because the Actual Cost (AC) of $140,000 exceeds the EV, giving a Cost Performance Index (CPI) of 0.857. Thus, option B correctly identifies both schedule and cost issues.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
The project is behind schedule but under budget.
Why it's wrong here
This statement is incorrect because while the Schedule Performance Index (SPI) of 0.8 indicates the project is indeed behind schedule, the Cost Performance Index (CPI) of 0.857 signifies that the project is actually over budget. A CPI value less than 1.0 means that the actual cost incurred for the work performed is greater than the earned value, indicating unfavorable cost performance.
- ✓
The project is behind schedule and over budget.
Why this is correct
This is the correct assessment of the project's performance. The Schedule Performance Index (SPI) of 0.8, being less than 1.0, definitively indicates that the project is progressing slower than planned, meaning it is behind schedule. Concurrently, the Cost Performance Index (CPI) of 0.857, also less than 1.0, confirms that the project's actual costs are exceeding the budgeted costs for the work accomplished, thus it is over budget.
- ✗
The project is on schedule and under budget.
Why it's wrong here
This option is incorrect as both performance indices contradict the claims. For a project to be on schedule, its Schedule Performance Index (SPI) would need to be 1.0 or greater, but here it is 0.8. Similarly, to be under budget, the Cost Performance Index (CPI) must be greater than 1.0, yet it stands at 0.857. Both values clearly indicate unfavorable performance against the baseline.
- ✗
The project is ahead of schedule but over budget.
Why it's wrong here
This statement is inaccurate regarding schedule performance. While the Cost Performance Index (CPI) of 0.857 correctly identifies the project as over budget, the Schedule Performance Index (SPI) of 0.8 indicates the project is behind schedule, not ahead. An SPI greater than 1.0 would be required to claim the project is ahead of schedule, which is not the case here.
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