A project manager is reviewing the following data: Earned Value (EV) is $10,000, Actual Cost (AC) is $12,000, and Planned Value (PV) is $11,000. Based on these figures, which statement best describes the project's performance?
The project is over budget and behind schedule.
The project is over budget but ahead of schedule.
The project is under budget and ahead of schedule.
To determine the project's performance, we calculate the cost variance and schedule variance. The cost variance (CV) is calculated as CV = EV - AC = $10,000 - $12,000 = -$2,000. A negative cost variance means the project is over budget. The schedule variance (SV) is calculated as SV = EV - PV = $10,000 - $11,000 = -$1,000. A negative schedule variance indicates the project is behind schedule. Therefore, the project is over budget and behind schedule. The other options either misinterpret the variances or incorrectly assess the project's status based on the provided data.
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What are Earned Value (EV), Actual Cost (AC), and Planned Value (PV)?
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Predictive, Plan-Based Methodologies
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