In EVM forecasting, the EAC = AC + (BAC - EV) method assumes remaining work will be completed at what rate?

In EVM forecasting, the EAC = AC + (BAC - EV) method assumes remaining work will be completed at what rate?

• A. current rate.
• B. fastest possible rate.
• C. planned rate.
• D. historical average rate.

Answer: (C)

This item tests how EAC forecasts treat the rate for the remaining work. The formula EAC = AC + (BAC - EV) is built on the assumption that the work left will be completed at the planned rate. BAC is the total budget, EV is the value of work actually completed, and AC is what has been spent so far. The remaining budgeted cost is BAC minus EV, and adding that to the actual costs to date implies the future work will proceed exactly as originally planned, without any change in efficiency. That’s why the rate for the rest of the project is the planned rate, not the current pace, the fastest possible pace, or a historical average—the formula does not incorporate any performance adjustments.

This item tests how EAC forecasts treat the rate for the remaining work. The formula EAC = AC + (BAC - EV) is built on the assumption that the work left will be completed at the planned rate. BAC is the total budget, EV is the value of work actually completed, and AC is what has been spent so far. The remaining budgeted cost is BAC minus EV, and adding that to the actual costs to date implies the future work will proceed exactly as originally planned, without any change in efficiency. That’s why the rate for the rest of the project is the planned rate, not the current pace, the fastest possible pace, or a historical average—the formula does not incorporate any performance adjustments.