PMP Earned Value Management Questions: Formulas, a Worked Example and 7 Practice Questions

Earned value management (EVM) measures project performance by comparing three numbers: planned value (PV, the work you planned to finish by now), earned value (EV, the budgeted value of the work actually finished) and actual cost (AC, what you've spent). From those three you get cost and schedule variances, performance indexes (CPI and SPI), and forecasts like the estimate at completion (EAC). On the 2026 PMP exam, EVM appears in calculation questions and in graphic-based questions where you read an S-curve.

I'm Gulab Chand Tejwani, PMP and Microsoft Certified Trainer. In my batches, EVM is the topic people either fear or skip. Neither works. There are only a handful of formulas, they follow one logic, and once you see that logic you can rebuild any of them in the exam without memorising a sheet.

What do PV, EV and AC mean?

Say you're building a 10-room training centre with a budget at completion (BAC) of ₹100,000, and the plan is to finish one room a month.

• Planned value (PV) is the budgeted cost of the work scheduled to be done by now. After 4 months, you planned 4 rooms, so PV = ₹40,000.
• Earned value (EV) is the budgeted cost of the work actually done. If 3.5 rooms are finished, EV = 35% of ₹100,000 = ₹35,000.
• Actual cost (AC) is what you've really spent. Say AC = ₹42,000.

EV is the one people get wrong. It's not money spent. It's the budget value of what you've completed. That's why every formula starts with EV: you're comparing what you achieved against what you planned (PV) or what you paid (AC).

What are the PMP earned value formulas?

Measure	Formula	How to read it
Cost variance (CV)	EV − AC	Negative = over budget
Schedule variance (SV)	EV − PV	Negative = behind schedule
Cost performance index (CPI)	EV / AC	Below 1 = over budget
Schedule performance index (SPI)	EV / PV	Below 1 = behind schedule
Estimate at completion (EAC), typical	BAC / CPI	Current cost performance continues
EAC, atypical	AC + (BAC − EV)	Past variance was a one-off
EAC, cost and schedule	AC + (BAC − EV) / (CPI × SPI)	Both indexes will keep affecting cost
Estimate to complete (ETC)	EAC − AC	Money still needed
Variance at completion (VAC)	BAC − EAC	Negative = expected overrun
To-complete performance index (TCPI)	(BAC − EV) / (BAC − AC)	Efficiency needed to finish on budget

A memory trick that works: EV comes first in every variance and index. Variances subtract, indexes divide. Cost uses AC, schedule uses PV.

Worked example: is the training centre project healthy?

Using the numbers above (BAC ₹100,000, PV ₹40,000, EV ₹35,000, AC ₹42,000):

1. CV = 35,000 − 42,000 = −₹7,000. You've spent ₹7,000 more than the value of the work done.
2. SV = 35,000 − 40,000 = −₹5,000. You've done ₹5,000 less work than planned.
3. CPI = 35,000 / 42,000 = 0.83. For every rupee spent, you're getting about 83 paise of work.
4. SPI = 35,000 / 40,000 = 0.875. You're progressing at 87.5% of the planned rate.
5. EAC (typical) = 100,000 / 0.8333 = ₹120,000. If cost performance stays the same, the project will cost ₹120,000.
6. ETC = 120,000 − 42,000 = ₹78,000 still to spend.
7. VAC = 100,000 − 120,000 = −₹20,000. Expected overrun.
8. TCPI = (100,000 − 35,000) / (100,000 − 42,000) = 65,000 / 58,000 = 1.12. To finish on the original budget, the team must now deliver ₹1.12 of work for every rupee, much better than its current 0.83. That's rarely realistic, which is a signal to talk to the sponsor.

If the overrun came from a one-off event (say, a single expensive repair that won't recur), use the atypical EAC: 42,000 + (100,000 − 35,000) = ₹107,000.

Which EAC formula should you use on the exam?

The question tells you, usually in words rather than formulas:

• "Current performance is expected to continue" or no hint at all: BAC / CPI.
• "The variance was a one-time event" or "future work will go as originally planned": AC + (BAC − EV).
• "Both cost and schedule performance will affect the remaining work": AC + (BAC − EV) / (CPI × SPI).
• "The original estimate is flawed" and a new bottom-up estimate is given: AC + new ETC.

Practice questions

Question 1Process · Plan and manage finance

Your project has EV of 50,000, AC of 60,000 and PV of 55,000. What is the project's status?

1. AUnder budget and ahead of schedule
2. BOver budget and behind schedule
3. COver budget and ahead of schedule
4. DUnder budget and behind schedule

Show answer and explanation+

Correct answer: B

CPI = 50,000 / 60,000 = 0.83, so over budget. SPI = 50,000 / 55,000 = 0.91, so behind schedule. Both below 1.

Question 2Process · Plan and manage finance

BAC is 200,000 and the CPI to date is 0.8. Management expects current cost performance to continue. What is the EAC?

1. A160,000
2. B200,000
3. C250,000
4. D240,000

Show answer and explanation+

Correct answer: C

EAC = BAC / CPI = 200,000 / 0.8 = 250,000. "Current performance will continue" is the cue for the typical formula.

Question 3Process · Plan and manage finance

BAC is 500,000, EV is 200,000 and AC is 250,000. The overrun was caused by a one-time equipment failure that won't recur. What is the EAC?

1. A550,000
2. B625,000
3. C500,000
4. D450,000

Show answer and explanation+

Correct answer: A

A one-off variance means the remaining work will cost what was planned. EAC = AC + (BAC − EV) = 250,000 + 300,000 = 550,000. Option B (BAC / CPI = 500,000 / 0.8) would assume the overrun continues.

Question 4Process · Plan and manage finance

BAC is 100,000, EV is 40,000 and AC is 50,000. What TCPI is needed to finish within the original budget?

1. A0.8
2. B1.0
3. C0.83
4. D1.2

Show answer and explanation+

Correct answer: D

TCPI = (BAC − EV) / (BAC − AC) = 60,000 / 50,000 = 1.2. The team must be 20% more cost-efficient than planned for the rest of the project, while its CPI so far is 0.8. That gap is worth raising with the sponsor.

Question 5Process · Evaluate project status

Your project's SPI is 1.1 and CPI is 0.9. What does this tell you?

1. ABehind schedule and under budget
2. BAhead of schedule and over budget
3. CAhead of schedule and under budget
4. DBehind schedule and over budget

Show answer and explanation+

Correct answer: B

SPI above 1 means more work is done than planned. CPI below 1 means the work is costing more than budgeted. This pattern often shows up when a team adds overtime or extra people to go faster.

Question 6Process · Evaluate project status (chart)

On a status chart at the reporting date, the AC line sits highest, the PV line is in the middle and the EV line is lowest. What should you conclude?

1. AThe project is under budget but behind schedule
2. BThe project is ahead of schedule and on budget
3. CThe project is over budget and behind schedule
4. DYou can't tell without the BAC

Show answer and explanation+

Correct answer: C

EV below AC means over budget (CV negative). EV below PV means behind schedule (SV negative). You don't need BAC to read the status, only to forecast.

Question 7Process · Plan and manage finance

BAC is 300,000 and the current EAC is 330,000. What is the variance at completion, and what does it mean?

1. A−30,000: the project is expected to overrun by 30,000
2. B30,000: the project is expected to finish under budget
3. C−30,000: the project has already overspent by 30,000
4. D1.1: the project is 10% over budget

Show answer and explanation+

Correct answer: A

VAC = BAC − EAC = 300,000 − 330,000 = −30,000. It's a forecast of the final overrun, not money already spent. That's the difference between A and C.

What should you do when EVM shows a problem?

The calculation is only half the question. The PMP exam usually follows the numbers with "what should the project manager do next?". The pattern:

1. Find the cause. A low CPI might come from rework, rate increases or poor estimates. Each needs a different fix.
2. Forecast honestly. Use the EAC formula that matches the cause, not the one that looks best.
3. Talk to the sponsor early if VAC is negative or TCPI is well above 1, and come with options.
4. Use change control for any change to the cost baseline. Don't quietly re-baseline to make the numbers look better.

Is earned value still on the PMP exam in 2026?

Yes. Managing finance and evaluating project status are tasks in the Process domain, and the new graphic-based item type makes chart-reading questions like question 6 more likely. Agile projects use different tools (burndown and burnup charts, velocity), but hybrid scenarios can still put a cost question in front of you. If you want to practise reading agile charts too, question 11 in the sample PMP exam questions is a burndown problem.

Where can you practise more EVM questions?

Do ten EVM calculations a day for a week, by hand, until the formulas are automatic. Then practise them mixed into full exams, because on test day a calculation sits between a stakeholder question and a risk question, and switching between them takes practice too.

Our PMP mock exams follow the 2026 format (180 questions, 240 minutes) and mix calculation, chart and situational questions the way the real exam does. Your first full mock is free to activate with no card needed. For the Process domain more broadly, the Process domain practice questions cover finance, quality, procurement and scope.

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For the full route from eligibility to exam day, see how to prepare for the PMP exam, step by step.

FAQ

What is earned value in project management?

Earned value (EV) is the budgeted cost of the work actually completed to date. Compared with planned value and actual cost, it shows whether a project is ahead or behind schedule and over or under budget.

What is the formula for CPI and SPI?

CPI = EV / AC (cost performance) and SPI = EV / PV (schedule performance). A value below 1 means the project is doing worse than planned. Above 1 means better.

What is the difference between EAC and ETC?

EAC is the forecast total cost of the whole project. ETC is the money still needed from now to the finish. ETC = EAC − AC.

Do I need to memorise EVM formulas for the PMP exam?

Yes, though you won't need many. Learn the logic (EV first, variances subtract, indexes divide, cost uses AC, schedule uses PV) and you can rebuild most formulas during the exam.

Is a negative cost variance good or bad?

Bad. A negative CV means you've spent more than the value of the work completed, so the project is over budget.