Example (EAC) Case-I:

You have a project which is worth 500,000 USD. Seven months have passed and 350,000 USD has been spent. Upon closer review you find that only 60% of the work is completed; however, as per the schedule, 65% of the work should have been completed.

Determine the Estimate at Completion (EAC).

Solution:

Estimate At Completion = (Budget At Completion)/(Cost

Performance Index) EAC = BAC/CPI

And,

Cost Performance Index = (Earned

Value)/(Actual Cost) CPI = EV/AC

Earned Value = 60% of BAC

= 0.6 * 500,000

= 300,000

Actual Cost

= 350,000

Hence,

CPI = (Earned Value)/(Actual Cost)

= 300,000/350,000

= 0.86

Hence,

EAC = 500,000/0.86

= 581,395

Hence the Estimate at Completion (EAC) is 581,395 USD.

Practice Question: 11

You have recently joined an ongoing project. The cost of the project is 350,000 USD, and 150,000 USD has already been spent and 40% of the work is actually completed. However, according to the schedule, 43% of the work should have been completed to date.

Determine the EAC