Formulas / Math for PMP

1. PERT 2. Standard Deviation 3. Variance 4. Float or Slack 5. Cost Variance 6. Schedule Variance 7. Cost Perf. Index 8. Sched. Perf. Index 9. Est. At Completion (EAC) (P + 4M + O )/ 6 Pessimistic, Most Likely, Optimistic (P - O) / 6 [(P - O)/6 ]squared LS-ES and LF-EF EV - AC EV - PV EV / AC EV / PV AC + bottom up ETC -- Initial Estimates are flawed AC + (BAC EV) -- Future variance are Atypical, work performed at the budgeted rate. Future condition will improve. (BAC - EV) / cumulative CPI -- Future Variance would be typical, work performed at the present CPI. What project experienced will continue in the future. AC + [(BAC EV)/ (cumulative CPI x cumulative SPI)] Use when project schedule is a factor impacting the ETC effort. EAC AC How much more will the project cost. Re-estimate the work from bottom up. Percentage complete 11. Var. At Completion 12. To Complete Performance Index TCPI Work Remaining Funds Remaining EV/ BAC BAC - EAC Values for the TCPI index of less then 1.0 is good because it indicates the efficiency to complete is less than planned. How efficient must the project team be to complete the remaining work with the remaining money? ( BAC - EV ) / ( BAC - AC ) BAC is the cost performance goal. Before new budget is being approved. ( BAC - EV ) / ( EAC - AC ) EAC is the cost performance goal, use when original budget baseline is no longer attainable. Bigger is better (NPV) FV / (1 + r)^term; for Future Value = PV x (1x interest rate or discounted rate) ^term think CD with Bank. Bigger is better (IRR)

10. Est. To Complete

13. Net Present Value 14. Present Value PV 15. Internal Rate of Return

16. Benefit Cost Ratio

Bigger is better ((BCR or Benefit / Cost) revenue or payback VS. cost) Or PV or Revenue / PV of Cost Less is better Net Investment / Avg. Annual cash flow. PV

17. Payback Period

18. BCWS -budgeted cost of work scheduled 19. BCWP budgeted EV cost of work performed 20. ACWP actual cost AC of work performed 21. Order of Magnitude -25% - +75% (-50 to +50% PMBOK) Estimate 22. Budget Estimate -10% - +25% 23. Definitive Estimate -5% - +10% 24. Comm. Channels N(N -1)/2 25. Expected Monetary Probability * Impact Value 26. Point of Total ((Ceiling Price - Target Price)/buyer's Share Ratio) + Target Assumption (PTA): Cost (use for fixed price incentive fee contract) amount above which the seller bears all the loss Example: or cost overrun. Target Cost: 60,000 Target profit: 6000 Target Price: 63,000 Celing Price: 65,000 Share Ratio: 70% Buyer and 30% seller PTA = (( 65000 - 63000 ) / 0.7 ) + 60000 = 62857 Cost reimbursable contract, Point of Total Assumption (also referred to as break point) PTA = [{(Ceiling Price - (Target Cost+Fixed fee))/buyer Benefit Sharing} + Target Cost] Example: target Cost = 1,000,000; Fixed Fee = 100,000;

benefit/cost sharing = 80%/20%; Price ceiling = 1,200,000 PTA = {(1,200,000 - (1,000,000+100,000))/0.80}+1,000,000 = 1,125,000 1 2 3 6 = = = = 68.27% 95.45% 99.73% 99.99985%

Sigma

Return on Sales ( ROS ) Return on Assets( ROA ) Return on Investment ( ROI ) Working Capital Discounted Cash Flow

Net Income Before Taxes (NEBT) / Total Sales OR Net Income After Taxes ( NEAT ) / Total Sales NEBT / Total Assets OR NEAT / Total Assets NEBT / Total Investment OR NEAT / Total Investment Current Assets - Current Liabilities Cash Flow X Discount Factor Savings = Target Cost Actual Cost

Contract related formulas

Bonus = Savings x Percentage Contract Cost = Bonus + Fees Total Cost = Actual Cost + Contract Cost

Burn Rate Straight-line depreciation

1/CPI where CPI = Cost performance Index. (Initial Cost Scrap value)/life A computer cost 1500, with scrap value of 300 and last 3 years: ($1500 - $300)/3 = $400