This quiz covers the core concepts from Module 4. Questions 1–5 are multiple choice — select the best answer. Questions 6–9 are short-answer and calculation — work through your answer first, then reveal the model answer.
Score tracker:0 of 5 multiple choice answered
Part A — Multiple Choice
Q1. What metric in EVM compares the value of work completed to the budgeted cost for that work?
Explanation: CPI = EV ÷ AC. It measures how much value (earned value) you are getting for every dollar of actual cost spent — making it the metric that directly compares work completed against its budgeted cost. SPI measures schedule efficiency (EV ÷ PV). EAC is a forecast of total project cost. SV measures the dollar difference between work done and work planned.
Q2. A project with a CPI of 1.1 indicates:
Explanation: CPI of 1.1 means EV > AC — for every $1 spent, $1.10 of value is being earned. The project is under budget (B). Note: C is also technically correct — spending less per unit of work completed is the same condition expressed differently. D is also true (CPI says nothing about schedule), but B is the primary, most direct answer. A is wrong — CPI says nothing about schedule; that is SPI's role.
Q3. What is the main purpose of Earned Value Management?
Explanation: EVM integrates project scope, cost, and schedule into a single performance measurement system. Its primary purpose is to objectively assess how a project is performing against its baseline — in terms of both cost and schedule — at any point during the project. While EVM can help with resource tracking and early risk identification as a secondary benefit, those are not its primary purpose.
Q4. Earned Value (EV) is calculated by:
Explanation: EV is the budgeted cost of work actually performed (BCWP). It is calculated by multiplying the % complete of each work package by its budget. For example, if a task has a $100,000 budget and is 60% complete, the EV is $60,000 — regardless of what it actually cost. This is what separates EVM from simple cost tracking. Option A gives you PV (AC + SV = AC + EV − PV ≠ EV). Option B also resolves to PV. Option D is BAC.
Q5. A positive Schedule Variance (SV) signifies:
Explanation: SV = EV − PV. A positive SV means EV > PV — more work has been completed than was planned for the data date. The project is ahead of schedule. A negative SV means the project is behind schedule. Note: SV says nothing about cost — that is CV and CPI's role. A positive SV and a negative CV simultaneously means: ahead of schedule, but over budget.
Part B — Short Answer & Calculation
Work through your answer before revealing the model response. These questions are not auto-marked.
Q6. Briefly explain the difference between CPI and SPI.
Think about what each index measures before revealing the answer.
Model Answer:
CPI (Cost Performance Index) measures cost efficiency: CPI = EV ÷ AC. It tells you how much earned value you are generating for every dollar of actual cost. A CPI >1 means you are under budget; <1 means over budget. CPI relates to the financial health of the project.
SPI (Schedule Performance Index) measures schedule efficiency: SPI = EV ÷ PV. It tells you how much work you are completing relative to what was planned. An SPI >1 means you are ahead of schedule; <1 means behind. SPI relates to the time performance of the project.
Key distinction: CPI measures cost efficiency; SPI measures time/schedule efficiency. A project can have a strong CPI but a poor SPI, or vice versa.
Q7. Describe two benefits of using EVM in project management.
There are four covered in the lesson — name two with a brief explanation of each.
Model Answer (any two of the following):
1. Objective performance measurement. EVM provides quantitative, data-driven measures of project health — replacing subjective "traffic light" status reporting. A project cannot be reported as "Green" based on gut-feel when CPI and SPI data tell a different story.
2. Early warning of problems. Monitoring CPI and SPI trends over time allows issues to be identified weeks or months before they become critical — giving management time to take corrective action before the situation escalates.
3. Improved decision-making. EVM data supports fact-based decisions on resource allocation, scope changes, and schedule recovery — rather than decisions based on politics or assumptions.
4. Stakeholder confidence. Demonstrating control over scope, cost, and schedule with objective metrics builds confidence with clients, owners, and financiers — particularly on publicly funded or government projects where EVM reporting is often mandated.
Q8. A project is at Week 10. The Planned Value (PV) for this point is $50,000, and the Actual Cost (AC) is $55,000. Calculate the Cost Variance (CV) and Cost Performance Index (CPI).
Assume the project is on schedule (EV = PV) unless otherwise stated.
Hint: CV = EV − AC | CPI = EV ÷ AC
Model Answer:
Since the project is on schedule, EV = PV = $50,000.
CV = EV − AC = $50,000 − $55,000 = −$5,000
CPI = EV ÷ AC = $50,000 ÷ $55,000 = 0.91
Interpretation: The negative CV of −$5,000 means the project is over budget by $5,000 at Week 10. The CPI of 0.91 means the project is only getting $0.91 of value for every $1.00 spent. At this rate, if no corrective action is taken, the final cost will exceed the original budget. This is a warning signal that warrants investigation.
Q9. Explain how a project manager can use EVM to identify potential problems and take corrective actions.
Think about what declining trends in CPI and SPI tell you, and what a PM would do in response.
Model Answer:
Identifying problems: By tracking CPI and SPI over successive reporting periods, a project manager can identify negative trends before they become critical. A CPI that starts at 1.0 and declines to 0.85 over three periods is a clear warning that costs are running ahead of output — even if the absolute numbers still look manageable. Similarly, an SPI trending below 1.0 indicates growing schedule slippage. The S-curve provides a visual representation of these divergences between PV, EV, and AC.
Taking corrective action: Once a performance issue is identified, the PM investigates the root cause — is it a specific work package, a subcontractor, a resource constraint, or a scope issue? Possible corrective actions include:
Reallocating resources to under-performing areas
Crashing or fast-tracking the schedule to recover lost time
Raising a variation for scope changes that have inflated cost
Rebaselining the project if the original baseline is no longer achievable
Improving cost control processes if ACWP data is being misreported
The earlier a problem is identified through EVM trend analysis, the more options the PM has for recovery — and the lower the cost of that recovery.