CAPM (Certified Associate in Project Management) Practice Exam

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What is the formula for ETC when prior variances are considered typical?

  1. ETC = BAC + EV

  2. ETC = (BAC - EV)/CPI

  3. ETC = AC + BAC

  4. ETC = (AC - EV)/CPI

The correct answer is: ETC = (BAC - EV)/CPI

ETC = (BAC - EV)/CPI Explanation ETC (Estimate to Complete) is a metric used in project management to estimate how much additional budget will be required to complete a project. The formula for ETC when prior variances are considered typical is (BAC - EV)/CPI. Option A, ETC = BAC + EV, is incorrect because it ignores the impact of prior variances, which can affect the actual cost of the project. Option C, ETC = AC + BAC, is incorrect because it does not account for the Earned Value (EV) of the project, which is an important component in calculating ETC. Option D, ETC = (AC - EV)/CPI, is incorrect because it uses the actual cost (AC) instead of the budget at completion (BAC), which is the planned budget for the entire project. The correct formula, ETC = (BAC - EV)/CPI, takes into account both the budget at completion (BAC) and the earned value (EV), and uses Cost Performance Index (CPI) to adjust for any prior variances. This gives a more accurate estimate of the additional budget needed to

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