Question

Your project has a budget of $290,000 and is 30 percent complete. You have spent $90,000 on your project, however due to some rework and additional time from a vendor. Your project is supposed to be 50 percent complete by this time. What is your estimate to complete (ETC) for this project?

Answer 1

Sol:

Find the Estimate to Complete (ETC) for this project.

Given in the question:

Budget at Completion (BAC) = $290,000

Actual Cost (AC) = $90,000

Planned Value (PV) = 50% of $290,000

= $145,000

Earned Value (EV) = 30% of $290,000

= $87,000

To determine the ETC, you need the EAC.

And, EAC = BAC / CPI

Hence, Cost Performance Index (CPI) = EV / AC

= $87,000 / $90,000

CPI = 0.9667

Therefore,

Cost Performance Index (CPI) = 0.9667

Now, Estimate at Completion (EAC) = BAC / CPI

= $290,000 / 0.9667

= $299989.656

EAC = $299,990 (approx)

Estimate at Completion (EAC) = $299,990

Now, Estimate to Complete (ETC) = EAC – AC

= $299,990 – $90,000

ETC = $209,990

Hence,

The Estimate to Complete (ETC) for this project is $209,990

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