Project Management Professional (PMP) — Question 1192

A project manager is performing earned value management (EVM) for a cross-country pipeline project. The project manager has determined the ratio of earned value (EV) to actual cost (AC) for the project and has found the calculated result to be 0.9024.
What does this value mean for the project?

Answer options

• A. The project is earning less value than was planned
• B. The project has started exceeding the planned cost
• C. The project has earned more value than planned
• D. The project is close to exceeding the planned cost

Correct answer: B

Explanation

The ratio of earned value (EV) to actual cost (AC) being less than 1 indicates that the project is incurring costs greater than the value it has produced, meaning it is earning less than planned. Options A and C misinterpret this ratio, while D suggests a proximity to exceeding planned costs, but B accurately reflects the situation that the project is exceeding costs.