Earn Value
Formulas

PV (Planned Value) = BCWS (Budgeted Cost of Work
Scheduled
EV (Earned Value) = BCWP (Budgeted Cost of Work
Performed)
AC (Actual Cost) = ACWP (Actual Cost of Work
Performed)
SV = EV – PV (A negative value indicates that project is behind schedule)
CV = EV – AC (A negative value indicates that project is over budget)
SPI = EV/PV (Less than 1 is behind schedule)
CPI = EV/AC (Less than 1 is over budget)
EAC = AC + (BACEV) Use when
variances are atypical
EAC = AC + [(BACEV)/CPI] Use when
variances are typical
(Note: This is the same as EAC = BAC/CPI)
VAC = BAC – EAC
ETC = BAC – EV Use when variances are
atypical
ETC = (BAC – EV)/CPI Use when
variances are typical
ETC = EAC – AC Use when
original estimates were flawed
TCPI  To complete performance Index
TCPI = BACEV/BACAC
TCP (EAC Based) = BACEV/EACAC

Calculating Slack or Floa t
What is Free Float?

Critical path is the longest path in the project network diagram and it determines the planned duration. A project can have more than one critical path. Critical path may change during the project life cycle.
Total Float (also called Slack, Float, or Project
Float) is the total amount of time an activity can be delayed without
delaying the project finish date.
Free Float/Slack is the amount of time an
activity can be delayed without delaying its successor (following activity).
Ø LS – ES: Calculates slack with forward pass
Ø LF – EF: Calculates slack with backwards pass
Lag Time: Inserted wait time between
activities
Lead Time: Overlapping activities, also called paralleling or fast tracking. “Lead In; Lag Out”
For the activities on the critical path float is zero.
Free Float – Amount of delay we can afford in a predecessor
without delaying the early start of successor.

Three Point Estimates, or PERT

PERT =
PROGRAM Evaluation and Review Technique
Holds schedule and lets cost float
3 estimates for each task: Optimistic,
Pessimistic, and Most Likely
For Beta
or Normal Distribution
Mean Estimate = (O + 4*ML + P)/6
Standard Deviation (s) = (P – O)/6
For Triangular Distribution
Mean Estimates = 0+M+P/3

Accuracy of Estimates

Order of Magnitude:25% to +75%
Budget Estimate:10% to +25%
Definitive Estimate:5% to +10%

Channels of Communication

Between Team Members = N(N1)/2 where N is the no
of team members

Project Selection Financials or project Appraisal

NPV (Net
Present Value) = FV/(1+r)n
FV= Future Value, r= interest rate, n= no. of
time periods
Higher NPV is better
IRR
(Internal Rate of Return) = Solve the NPV equation for “r”
Also called Hurdle Rate
Higher IRR percentage is better
BCR
(Benefit/Cost Ratio)
Higher BCR is better.
Beware, exam can call it CBR, where lower is
better
ROI
(Return on Investment) = Earnings/Investment
Higher ROI is better
Payback Period = Time to recover cost of the
project
Lower payback period is better
All the Appraisal techniques mentioned above help in assessing the business justification of the project.

 Communication Management
 Cost Management
 Formula Key and PMP Concepts
 Integration Management
 Online Practice Test (200 questions each)
 Procurement Management
 Quality Management
 QUICK Reference PPTsPMBOK Sixth Edition
 Resource Management
 Risk Management
 Road map to become PMP
 Schedule Management
 Scope Management
 Stakeholder Management
PMP Formula Key and PMP Concepts
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