Project Management Professional (PMP) Practice Exam

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Study for the Project Management Professional (PMP) exam. Study with flashcards and multiple choice questions. With over 500 questions. Practice the PMP practice multiple choice questions. Updated for 2023-2025. Get ready for your exam!

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Your project exceeded costs in the past caused by an underestimation of resource costs in the cost baseline: PV: $1,200,000, EV: $1,000,000, AC: $1,200,000 You expect the underestimation to influence the future as much as it did in the past. If the value of the remaining work (BAC – EV) is at $1,000,000, what should be your new EAC (estimate at completion)?

$1,800,000
$2,000,000
$2,200,000
$2,400,000

The correct answer is: $2,400,000

The new EAC (estimate at completion) should be $2,400,000. This is because the remaining work (BAC - EV) is now at $1,000,000, which means that the project has already spent $1,200,000 (AC) but has only earned $1,000,000 (EV). This results in a negative cost variance of $200,000 (EV - AC = $1,000,000 - $1,200,000 = -$200,000). In order to make up for this shortfall and avoid exceeding the total project budget, the estimated cost at completion (EAC) needs to increase by the same amount. Therefore, the new EAC should be calculated by adding the remaining work ($1,000,000) to the actual cost incurred ($1,200,000) and the negative cost variance ($-200