PMP Earned Value Management: Practice Questions & Formulas

Earned value management (EVM) is one of the most formula-heavy topics on the PMP exam and a critical tool for project performance measurement. EVM integrates scope, schedule, and cost data to provide objective measures of project progress and forecasting.

The three fundamental EVM values are: Planned Value (PV)—the authorized budget for scheduled work, Earned Value (EV)—the value of completed work measured against the budget, and Actual Cost (AC)—the actual expenditure for completed work. From these, you derive variances and indices: Cost Variance (CV = EV - AC), Schedule Variance (SV = EV - PV), Cost Performance Index (CPI = EV / AC), and Schedule Performance Index (SPI = EV / PV).

Forecasting formulas are frequently tested. The primary Estimate at Completion (EAC) formulas are: EAC = BAC / CPI (current trend continues), EAC = AC + (BAC - EV) (original estimate is flawed, re-estimate remaining), EAC = AC + bottom-up ETC (remaining work re-estimated), and EAC = AC + (BAC - EV) / (CPI × SPI) (both cost and schedule factors). Estimate to Complete (ETC = EAC - AC) and Variance at Completion (VAC = BAC - EAC) are also important. To Complete Performance Index (TCPI) measures the efficiency required to meet a target: TCPI = (BAC - EV) / (BAC - AC) or (BAC - EV) / (EAC - AC).

Common traps include misapplying EAC formulas—each assumes different conditions. Negative variance always means unfavorable (over budget or behind schedule). CPI and SPI below 1.0 are bad; above 1.0 are good. Another trap is confusing schedule variance (in cost terms) with actual schedule delay—SV is measured in monetary units, not time.

Frequently Asked Questions

What EVM formulas do I need to know for the PMP exam?
The essential PMP EVM formulas are: PV (Planned Value), EV (Earned Value), AC (Actual Cost), SV = EV−PV (Schedule Variance), CV = EV−AC (Cost Variance), SPI = EV/PV (Schedule Performance Index), CPI = EV/AC (Cost Performance Index), EAC = BAC/CPI (Estimate at Completion for typical variance), EAC = AC+(BAC−EV) for atypical variance, ETC = EAC−AC (Estimate to Complete), and TCPI = (BAC−EV)/(BAC−AC) (To-Complete Performance Index). Write these on your scratch paper at the start of the exam.
What is Earned Value (EV) in project management?
Earned Value (EV) is the budgeted cost of work actually performed. It represents the value of completed work in terms of the approved budget. EV is calculated as: Budget at Completion (BAC) × percentage of work actually completed. EV is the foundation of Earned Value Management — it allows project managers to measure both schedule and cost performance objectively.
What does a CPI of 0.8 mean on the PMP exam?
A CPI (Cost Performance Index) of 0.8 means the project is over budget — you are getting $0.80 of value for every $1.00 spent. CPI < 1 indicates cost overrun. On PMP exam questions, a CPI of 0.8 typically triggers the need for corrective action. The Estimate at Completion (EAC) would be recalculated as BAC/CPI to forecast the new total project cost.
How many EVM questions are on the PMP exam?
PMI does not publish the exact number of EVM questions. Based on candidate reports, EVM and cost management questions make up approximately 5-10% of the PMP exam. Questions appear in two formats: calculation questions (given EV/AC/PV values, calculate SPI/CPI/EAC) and situational questions (given a CPI of X, what should the project manager do?). Both types require you to understand what the metrics mean, not just how to calculate them.
What is the difference between EAC and ETC in PMP?
EAC (Estimate at Completion) is the expected total cost of the entire project — it includes what has already been spent (AC) plus the expected remaining cost. ETC (Estimate to Complete) is only the expected cost of the remaining work — it does not include what has already been spent. The relationship is: EAC = AC + ETC. On PMP exam questions, EAC is used to forecast the final project cost, while ETC answers 'how much more will it cost to finish?'