A project has a budget at completion (BAC) of $100,000. At the status date, earned value (EV) = $20,000, actual cost (AC) = $40,000, and planned value (PV) = $25,000. Management believes the current cost AND schedule inefficiencies will both continue for the remaining work. What is the estimate at completion (EAC)?

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Accepted Answer

$240,000. When both cost and schedule performance are expected to continue, EAC = AC + (BAC − EV) / (CPI × SPI). CPI = EV/AC = 20,000/40,000 = 0.5; SPI = EV/PV = 20,000/25,000 = 0.8; product = 0.40. EAC = 40,000 + (100,000 − 20,000)/0.40 = 40,000 + 80,000/0.40 = 40,000 + 200,000 = $240,000.

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