CAPM (Certified Associate in Project Management) Practice Exam

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Which value represents the approved budget intended to be spent during a specific period?

Planned Value (PV)
Actual Cost (AC)
Earned Value (EV)
Cost Performance Index (CPI)

The correct answer is: Planned Value (PV)

Planned Value (PV) represents the approved budget intended to be spent during a specific period. It is the authorized budget assigned to work to be accomplished for a specific time period. PV is a crucial parameter in project management as it helps in measuring the project's progress and performance against the original baseline plan. Earned Value (EV) represents the value of the project work that has been completed up to a specific point in time and is useful for assessing how much value has been earned against what was planned. Actual Cost (AC) represents the total cost incurred in completing the project work by a specific point in time. Cost Performance Index (CPI) is a measure of the cost efficiency of budgeted resources while performing the project work and is calculated as EV/AC.