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Exam PMI-SP topic 2 question 26 discussion

Actual exam question from PMI's PMI-SP
Question #: 26
Topic #: 2
[All PMI-SP Questions]

You work as a project manager for BlueWell Inc. You are calculating the performance indexes of your project. The cost variance (CV) of your project is 30. What does this figure depict?

  • A. Project is behind the schedule.
  • B. Costs are higher than planned.
  • C. Costs are right on target.
  • D. Costs are lower than planned.
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Suggested Answer: D 🗳️
According to the question, the cost variance of the project is 30, which is a positive figure. A positive value means that cost is less than planned. What is CV? Cost variance (CV) is a measure of cost performance on a project. The variance notifies if costs are higher than budgeted or lower than budgeted. The cost variance is calculated based on the following formula: CV = Earned Value (EV) - Actual Cost (AC) A positive value means that spending is less than budgeted, whereas a negative value indicates that costs are higher than originally planned for the project.
Incorrect Answers:
A: This result is depicted by viewing the schedule variance (SV), not the CV.
B: If the CV is a negative value, it depicts that the costs are higher than planned.
C: If the CV is zero, it shows that cost is right on target.

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