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Question:
A project manager is going to host a project status meeting later that afternoon. The project is reaching the most critical point and is currently 75 percent complete. The project manager decides to update the earned value calculations to present the latest performance updates that the sponsor will want to see. The budget at completion (BAC) is set at $550,000, and the current estimate at completion (EAC) is $525,000. What is the project's performance in terms of the budget?
A
It is under the planned cost.
explanation
If you want to determine performance against the budget, you must first calculate the variance at completion by subtracting the estimate at completion from the budget at completion (BAC – EAC): $550,000 – $525,000 = $25,000. A positive VAC indicates that the project is performing below the planned costs.
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