Question

Your project has a CPI of 0.98 and a schedule variance of ($12,000). Which statement is most accurate?

1) The project is ahead of schedule and over budget
2) The project is behind schedule and under budget
3) The project is over budget and behind schedule
4) The project is under budget and ahead of schedule

Answer 1

With a CPI of 0.98, the project is over budget, and a schedule variance of ($12,000) indicates the project is behind schedule. The correct statement is that the project is over budget and behind schedule.

Step-by-step explanation:

The subject of this question is project management, specifically related to evaluating project performance using Cost Performance Index (CPI) and Schedule Variance (SV). The Cost Performance Index (CPI) is a measure of the cost efficiency of budgeted resources, calculated as the ratio of earned value (EV) to actual cost (AC). A CPI less than 1 indicates that the project is over budget. Schedule Variance (SV) is a measure of schedule performance, calculated as the difference between earned value (EV) and planned value (PV). A negative SV indicates that the project is behind schedule.

Given the information, with a CPI of 0.98, the project is running slightly over budget, because the value is less than 1. A negative schedule variance of ($12,000) indicates that the project is behind schedule, as less work has been completed than was planned for this point in time. Therefore, the most accurate statement is that the project is over budget and behind schedule.