A contractor is currently constructing a new building for

your organization on a cost$-$plus$-$incentive contract. you just received the

project

status report from the contractor's project manager. according to the

report, the project's cpi is $1\mathrm{.}5.$ you are shocked because you believe the

project costs are out of control. upon investigation, you learn the $$1$ million

advance payment $(20$ percent of the estimated project cost$)$

given to the

contractor at the start of the project was included in the project's earned

value. further, the cost of the inventory at the project

site was excluded from

the total actual costs. according to the contract, your company reimburses only

the costs for the completed

deliverables and not for the supplies in the

project's inventory. in this scenario, the reported project's cpi is incorrect

because:

a$.$ Both

the earned value and the actual cost are overstated

b$.$ Earned

value is overstated, and actual cost is understated

c$.$ Actual

cost is understated

d$.$ Earned

value is overstated