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# TOPIC: A question on ETC

## A question on ETC 6 years 4 months ago #11409

 Puneet Maheshwari Topic Author Offline Junior Boarder Posts: 26 Thank you received: 1 Hi Can any one explain, why PV= 250,000X2 = 500,000 and SPI is not considered in below calculation. I tried to use formula EAC= BAC/(SPI* CPI) Please advise.... ============ Question: You are working on a 12 month assignment to build a website with 4,000 pages for \$1,000,000. You are supposed to spend \$250,000 every 3 months. After 6 months, you determine that only \$400,000 of work is completed and cost incurred is \$800,000. What is the ETC? Choice 1. \$2,000,000 Choice 2. \$1,500,000 Choice 3. \$1,000,000 Choice 4. \$1,200,000 Correct Choice: 4 Justification The default value of EAC (assuming current variances are typical) is calculated as below: CPI = EV/AC CPI = \$400,000 / \$800,000 CPI = 0.5 EAC = BAC/CPI EAC = \$1,000,000/0.5 EAC = \$2,000,000 So, ETC = EAC – AC = \$2,000,000 – \$800,000 = \$1,200,000 Reference: PMstudy.com comments ============ Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.

## A question on ETC 6 years 4 months ago #11423

 Tracy Shagnea, PMP Offline User is blocked Posts: 134 Karma: 7 Thank you received: 46 Hi Puneet, With regard to your questions: Can any one explain, why PV= 250,000X2 = 500,000 The planned spending is \$250,000 every 3 months. Since the calculation is taking place at the end of 6 months, then the PV is for 2 time periods, which yields 2 x \$250,000 = \$500,000 SPI is not considered in below calculation Because the question does not indicate that a deadline exists for completion, we would not use SPI, hence the EAC= BAC/(SPI* CPI) formula is not appropriate for this particular scenario. It will yield a much higher cost. The question is a wee bit tricky, since they do give you enough information to calculate the SPI, even though it is not needed for the given scenario. I hope this helps! Regards, Tracy Forum Moderator PMP, CSM, M.S. Management Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.
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