You are managing a project with a one-year duration and a budget at completion (BAC) of $ 100,000. After 6 months, the project is 40% complete and the actual cost (AC) is $40,000. Consider a linear project progress inn this case. Which one of the following statements is correct?

Question

BlackTom AI · Accepted Answer

Start by identifying the key values and applying earned value concepts. EV (earned value) = percent complete × BAC = 0.40 × 100,000 = 40,000. AC (actual cost) = 40,000. PV (planned value) at 6 months for a linear, one-year project = (6/12) × BAC = 0.5 × 100,000 = 50,000.

Option a: 'The project is behind the schedule and within the budget.' Here, schedule performance is assessed with Schedule Variance (SV) = EV − PV = 40,000 − 50,000 = −10,000, which indicates the project is behind schedule. Cost performance is assessed with Cost Variance (CV) = EV − AC = 40,000 − 40,000 = 0, which indicates the project is exactly on budget (within budget). Therefore this statement is true.

Option b: 'The project is behind the schedule and over the budget.' The project is indeed behind schedule (SV negative) but is not over budget (CV is zero). Since it is not over budget, this statement is incorrect.

Option c: 'The project is ahead of the schedule and within the budget.' The schedule is not ahead; it is behind (SV negative). Also, while the project is within budget, the premise of ahead of schedule makes this option false.

Option d: 'There is limited information to calculate the earning value of this project.' Earned value (EV) can be calculated as 40,000 from 40% of BAC, and PV is determinable from the linear progress assumption. This statement incorrectly claims information is limited, so it is false.

Option e: 'The project is ahead of the schedule and over the budget.' This contradicts both the calculated SV (behind schedule) and CV (not over budget). Thus, this is incorrect.

CVEN9731 Project Management Framework - 2025 T3

You are managing a project with a one-year duration and a budget at completion (BAC) of $ 100,000. After 6 months, the project is 40% complete and the actual cost (AC) is $40,000. Consider a linear project progress inn this case. Which one of the following statements is correct?

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