Donna’s project has a budget at completion of $1,987,560 and she is currently 40 percent
complete. Her project schedule called for her to be 45 percent complete but there have been some
complications in the project. These complications have caused Donna to spend $125,000 more
than what the work she has completed is worth. Based on this information what is the cost
performance index (CPI) for Donna’s project?

A.
86

B.
$920,024

C.
.90

D.
.86

Explanation:
Cost performance index (CPI) is used to calculate performance efficiencies. It is used in trend
analysis to predict future performance. CPI is the ratio of earned value to actual cost. The CPI is
calculated based on the following formula: CPI = Earned Value (EV) / Actual Cost (AC) If the CPI
value is greater than 1, it indicates better than expected performance, whereas if the value is less
than 1, it shows poor performance. The CPI value of 1 indicates that the project is right on target.
In this instance, the actual costs are $125,000 more than what the work is worth, which means
you’ll need to find the earned value, $795,024 and add $125,000 to find the actual costs of the
project, which are $920,024.
Answer option A is incorrect. This is a trick as 86 is not the same value as .86. On your PMP exam
pay attention to these little details.
Answer option C is incorrect. .90 is slightly more than the Schedule Performance Index of this
project.
Answer option B is incorrect. This value represents the actual cost of the project.