Suggested Answer:A🗳️
Cost performance index (CPI) is used to calculate performance efficiencies of project. It is used in trend analysis to predict future performance. CPI is the ratio of earned value to actual cost. If the CPI value is greater than 1, it indicates better than expected performance, whereas if the value is less than 1, it shows poor performance. Incorrect Answers: B: CPI is the ratio of earned value to actual cost, i.e., CPI = Earned Value (EV) / Actual Cost (AC). C: Cost performance index (CPI) is used to calculate performance efficiencies of project and not its schedule. D: The CPI value of 1 indicates that the project is right on target.
Formula for Cost performance Indicator (CPI) = Earned Value (EV) / Actual Cost (AC)
For example, if a project has a earned value (EV) of £20,000 but actual costs (AC) were £12,000:., then CPI = EV / AC = 20,000 / 12,000 = 1.66
The cost performance index (CPI) is a measure of the financial effectiveness and efficiency of a project. It represents the amount of completed work for every unit of cost spent. If the ratio has a value higher than 1 then it indicates the project is performing well against the budget. A CPI of 1 means that the project is performing on budget. A CPI of less than 1 means that the project is over budget.
The answer is B
The cost performance index (CPI) is a measure of the conformance of the actual work completed (measured by its earned value) to the actual cost incurred: CPI = EV / AC.
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