You are managing a construction project with a total approved budget (BAC) of $500,000. The project plan spans 12 months. Six months into the project, you determine that 40% of the total work has been completed, and the team has spent $240,000 (AC). To prepare for a status meeting with key stakeholders, what should you report as the project's Earned Value (EV)?
The correct answer is $200,000. Earned Value (EV) is calculated by multiplying the actual percentage of work completed by the Budget at Completion (BAC). The formula is EV = Actual % Complete x BAC. In this scenario, EV = 40% x $500,000 = 0.40 x $500,000 = $200,000. The time elapsed (6 months) and the Actual Cost (AC) of $240,000 are not used in the EV calculation itself, but are used for other performance metrics like Schedule Variance (SV) and Cost Variance (CV).
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