You are managing a complex infrastructure project with a 24-month timeline and a $15M budget. During month 14, earned value analysis shows: PV = $8.5M, EV = $7.2M, AC = $8.1M. The project has experienced significant scope changes, and three critical path activities are behind schedule. Your sponsor asks for a realistic forecast of final project cost and wants to understand if the current cost performance will continue. Considering the CPI trend has been declining over the past four months from 0.92 to 0.89, what is the most appropriate estimate at completion (EAC) to present?

Question

Accepted Answer

The correct answer is A. EAC = BAC / CPI is correct because the declining CPI trend (0.92 to 0.89) over four months indicates a persistent cost performance issue, not an anomaly. This formula assumes current cost efficiency will continue, which is the most realistic assumption given the established negative trend. Option D (bottom-up re-estimation) might seem appropriate but is premature—the question asks for the most appropriate forecast given current data, and the consistent CPI decline provides a reliable basis for projection. Option B incorrectly assumes past variances won't continue despite clear evidence of declining performance. Option C unnecessarily compounds schedule performance when the question specifically focuses on cost forecasting and the sponsor's concern about cost performance continuation.

More Process Questions