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1. What are the three project cost reference perspectives that are used by earned value analysis?
Project costs, project benefits, and corporate discount rate.
Project budget, project schedule, and project resource list.
Planned value, actual cost, and earned value.
2. In earned value analysis, what is the relationship between Current PV and Cumulative PV?
Current PV and Cumulative PV are synonyms. The Current PV is the cumulative sum of all PV up to the present point in time on the project.
Current PV is the planned, or budgeted, project costs for the current time period – normally monthly. The Cumulative PV is the sum of all Current PVs from the beginning of the project up to through the current time period.
Current PV is the PV that the stakeholders desire the project to spend and Cumulative PV is the actual costs that the project has incurred.
3. What is a variance on a project?
When a project is changed through the formal change request process.
When actual project performance is different than planned project performance.
When a project manager requests a change to the Project Charter because the project is late or overrun.
4. When calculating cost variance on a project while it is partially complete, what is a factor that project managers must account for when comparing the actual costs to the planned or budgeted costs?
Project estimates are often inaccurate. The project manager must account for the nature of the inaccuracies when doing the calculation.
A lag in the financial reporting system can result in actual costs being reported for a different time period than planned costs.
A project is seldom precisely on schedule. The actual costs are for the work actually performed. The planned costs are for the work that should have been performed. The cost variance will be impacted by the amount of schedule variance.
5. What is the difference between a positive and negative schedule variance?
A positive variance is a schedule variance for which there is no recovery plan and negative variance is one for which there is a recovery plan.
A positive variance indicates the project is ahead of schedule and a negative variance indicates it is behind schedule.
A positive variance is a variance that has already occurred and a negative variance is one that is anticipated to occur in the future.
6. Under what circumstances will the EV for the task exceed the PV for the task?
EV can never exceed the PV.
When the task is behind schedule and overrun, the EV will exceed the PV by the amount of the overrun.
EV can never exceed PV for tasks, but it can exceed the PV for the project when there is scope creep.
7. What does it mean to set the EV for a task using the 30 - 70 rule?
A task Earned Value is set by assigning 30% of the PV to EV when the task starts, that number is increased to 70% when the task is 50% complete, and is then set at 100% of PV when the task finishes.
A task Earned Value is set at 30% of the PV when the task starts, then at task completion the remaining 70% is added and the EV is set at 100% of the PV for the task.
A task Earned Value is set by assigning 30% of the cost to EV and 70% of the cost to AC when the task starts. That percentage is switched when the task is 50% complete.
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