8/12/2019 46274432 Key Concept and Formulas for PMP Exam (1)

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Key Concept and Formulas for PMP Exam

Earn Value Formulas

PV (Planned Value) = BCWS (Budgeted Cost of WorkScheduled

EV (Earned Value) = BCWP (Budgeted Cost of WorkPerformed)AC (Actual Cost) = ACWP (Actual Cost of Work Performed)SV = EV PV (minus is ehind schedule)

CV = EV AC (minus is o!er udget)SP" = EV#PV ($ess than % is ehind schedule)CP" = EV#AC ($ess than % is o!er udget)EAC = AC & (BAC'EV) se hen !ariances are at*+ical

EAC = AC & ,(BAC'EV)#CP"- se hen !ariances aret*+ical(.ote/ 0his is the same as EAC = BAC#CP")VAC = BAC EAC

E0C = BAC EV se hen !ariances are at*+icalE0C = (BAC EV)#CP" se hen !ariances are t*+icalE0C = EAC AC se hen original estimates ere flaed

Project Selection Financials

.PV (.et Present Value) = FV#(%&r)nFV= Future Value1 r= interest rate1 n= no2 of time +eriods

3igher .PV is etter"44 ("nternal 4ate of 4eturn) = Sol!e the .PV e5uation for6r7Also called 3urdle 4ate

3igher "44 +ercentage is etterBC4 (Benefit#Cost 4atio)

3igher BC4 is etter2Beare1 e8am can call it CB41 here loer is etter

49" (4eturn on "n!estment) = Earnings#"n!estment3igher 49" is etter

Pa*ack Period = 0ime to reco!er cost of the +ro:ect$oer +a*ack +eriod is etterCash Flo = Cash "n Cash 9ut

.etork ;iagramPrecedence ;iagramming e using either 0hree'Point Estimates orCP