PMP® Formula Guide

Earned Value Mathematical Basics

CV = EV - AC Average (Mean) = Sum of all members divided by the number of items.
CPI = EV / AC Median = Arrange values from lowest value to highest. Pick the middle
SV = EV - PV one. If there is an even number of values, calculate the mean of the
SPI = EV / PV two middle values.
EAC ‘no variances’ = BAC / CPI Mode = Find the value in a data set that occurs most often.
EAC ‘fundamentally flawed’ = AC + ETC
EAC ‘atypical’ = AC + BAC - EV Values
EAC ‘typical’ = AC + ((BAC - EV) / CPI) 1 sigma = 68.26%
ETC = EAC - AC 2 sigma = 95.46%
ETC ‘atypical’ = BAC - EV
ETC ‘typical’ = (BAC - EV) / CPI
3 sigma = 99.73%
ETC ‘flawed’ = new estimate 6 sigma = 99.99%
Percent Complete = EV / BAC * 100 Control Limits = 3 sigma from mean
VAC = BAC - EAC Control Specifications/ Specification Limits = Defined by
EV = % complete * BAC customer; looser than the control limits
PERT Order of Magnitude estimate = -25% to +75%
Preliminary estimate = -15% to + 50%
PERT 3-point = (Pessimistic + (4*Most Likely)+Optimistic)/6 Budget estimate = -10% to +25%
PERT S.D (σ) = (Pessimistic - Optimistic) / 6 Definitive estimate = -5% to +10%
PERT Activity Variance = ((Pessimistic - Optimistic) / 6)^2 Final estimate = 0%
Total S.D (σ) = Square Root (Sum of All Variance)
Float on the critical path = 0 days
Network Diagram Pareto Diagram = 80/20
Activity Duration = EF - ES or Activity Duration = LF - LS Time a PM spends communicating = 90%
Total Float = LS - ES or Total Float = LF – EF Crashing a project = Crash least expensive tasks on critical
Free Float = ES of Following Activity - EF of Present Activity path.
EF = ES + duration
JIT inventory = 0% (or very close to 0%)
ES = EF of predecessor
LF = LS of successor
LS = LF - duration
Acronyms
Project Selection AC Actual Cost
PV = FV / (1+r)^n BAC Budget at Completion
FV = PV * (1+r)^n
BCR Benefit Cost Ratio
NPV = Formula not required. Select biggest number.
ROI = Formula not required. Select biggest number. CBR Cost Benefit Ratio
IRR = Formula not required. Select biggest number. CPI Cost Performance Index
Payback Period = Add up the projected cash inflow minus expenses CV Cost Variance
until you reach the initial investment. DUR Duration
BCR = Benefit / Cost EAC Estimate at Completion
CBR = Cost / Benefit
Opportunity Cost = The value of the project not chosen. EF Early Finish
EMV Expected Monetary Value
Communications ES Early Start
Communication Channels = n * (n-1) / 2 ETC Estimate to Complete
EV Earned Value
Probability FV Future Value
EMV = Probability * Impact in currency
IRR Internal Rate of Return
Procurement LF Late Finish
PTA = ((Ceiling Price - Target Price) / Buyer's Share Ratio) + Target LS Late Start
Cost NPV Net Present Value
PERT Program Evaluation and Review Technique
Depreciation
Straight-line Depreciation: PTA Point of Total Assumption
Depr. Expense = Asset Cost / Useful Life PV Planned Value
Depr. Rate = 100% / Useful Life PV Present Value
ROI Return on Investment
Double Declining Balance Method: SPI Schedule Performance Index
Depr. Rate = 2 * (100% / Useful Life)
SV Schedule Variance
Depr. Expense = Depreciation Rate * Book Value at Beginning of Year
Book Value = Book Value at beginning of year - Depreciation Expense VAC Variance at Completion
σ Sigma / Standard Deviation
Sum-of-Years' Digits Method:
Sum of digits = Useful Life + (Useful Life - 1) + (Useful Life - 2) + etc.
Depr. rate = fraction of years left and sum of the digits (i.e. 4/15th)