A project manager is reviewing the project's performance and needs to calculate the Estimate at Completion (EAC). The project has a Budget at Completion (BAC) of $500,000, and the current Cost Performance Index (CPI) is 0.8. Which of the following represents the most likely EAC assuming the current performance trend continues?
The correct answer is $625,000. When calculating the Estimate at Completion (EAC) based on the current performance trend, the formula EAC = BAC / CPI is used. In this case, BAC = $500,000 and CPI = 0.8. Applying the formula: EAC = $500,000 / 0.8 = $625,000. This calculation assumes that the current cost performance will continue for the remainder of the project. It's important to note that this method is one of several ways to calculate EAC, and it's particularly useful when past performance is indicative of future results. The other options are incorrect because they either use the wrong formula or misinterpret the relationship between BAC, CPI, and EAC.
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