Example (EAC) Case-III:

You have a fixed deadline project with a budgeted cost of 600,000 USD. So far you have spent 300,000 USD and the value of the completed work is 275,000 USD. However, as per the schedule you should have earned 325,000 USD to date.

Calculate the Estimate at Completion (EAC).

Solution:

Given in the question:

Budget at Completion (BAC) =

600,000 USD Actual Cost (AC) =

300,000 USD

Earned Value (EV) =

275,000 USD Planned

Value (PV) = 325,000

USD

To calculate the EAC, first you have to calculate the CPI

and SPI. SPI = EV/PV

= 275,000/325,000

= 0.85

CPI = EV/AC

= 275,000/300,000

= 0.92

Now, you can use the formula

EAC = AC + (BAC EV)/(CPI*SPI)

= 300,000 + (600,000 - 275,000)/(0.85*0.92)

= 300,000 + 325,000/0.78

= 300,000 + 416,000

= 716,000

Hence, the Estimate at Completion is 716,000 USD.

Practice Question:

You have a project with a budgeted cost of 300,000 USD. So far you have spent 100,000 USD and the value of the completed work is 80,000 USD. However, as per the schedule you should have earned 90,000 USD to date.

Client is insisting to complete the project on time. Calculate the Estimate at Completion (EAC).