EAC, ETC, and VAC

In a construction project for building a new school in Kabul, Afghanistan, the initial Budget at Completion (BAC) is $2,000,000. The project is expected to be completed in 12 months. By the end of month 6, the project team has spent $1,200,000 and completed 40% of the work. The planned work completion by this time was 60%. Calculate the Estimate at Completion (EAC), Estimate to Complete (ETC), and Variance at Completion (VAC).

• EAC = $2,985,075 ETC = $1,785,075 VAC = -$985,075

• EAC = $2,000,000, ETC = $800,000, VAC = $0

• EAC = $2,400,000, ETC = $1,200,000, VAC = -$400,000

• EAC = $2,000,000, ETC = $1,200,000, VAC = $0

Answer explanation

• CPI = EV / AC = ($2,000,000 * 0.40) / $1,200,000 = $800,000 / $1,200,000 = 0.67

• Estimate at Completion (EAC) = BAC / CPI = $2,000,000 / 0.67 = $2,985,075

• Estimate to Complete (ETC) = EAC - AC = $2,985,075 - $1,200,000 = $1,785,075

• Variance at Completion (VAC) = BAC - EAC = $2,000,000 - $2,985,075 = -$985,075

During an agricultural project aimed at improving irrigation systems in rural Afghanistan, the BAC is $1,500,000, and the project duration is 10 months. By month 5, the project has spent $900,000 and completed 30% of the work. The planned work completion by this time was 50%. Calculate the EAC, ETC, and VAC.

• EAC = $1,875,000, ETC = $975,000, VAC = -$375,000

• EAC = $2,000,000, ETC = $1,200,000, VAC = -$500,000

• EAC = $1,500,000, ETC = $600,000, VAC = $0

• EAC = $3,000,000, ETC = $2,100,000, VAC = -$1,500,000

Answer explanation

Explanation:

• CPI = EV / AC = ($1,500,000 * 0.30) / $900,000 = $450,000 / $900,000 = 0.50

• Estimate at Completion (EAC) = BAC / CPI = $1,500,000 / 0.50 = $3,000,000

• Estimate to Complete (ETC) = EAC - AC = $3,000,000 - $900,000 = $2,100,000

• Variance at Completion (VAC) = BAC - EAC = $1,500,000 - $3,000,000 = -$1,500,000

In a healthcare project to set up a new clinic in Herat, Afghanistan, the BAC is $1,200,000, and the project is scheduled for 8 months. By the end of month 4, the project team has spent $600,000 and completed 35% of the work. The planned work completion by this time was 50%. Calculate the EAC, ETC, and VAC.

• EAC = $1,714,285, ETC = $114,285, VAC = -$514,285

• EAC = $1,500,000, ETC = $900,000, VAC = -$300,000

• EAC = $1,411,765, ETC = $900,000, VAC = -$211,765

• EAC = $1,200,000, ETC = $600,000, VAC = $0

Answer explanation

Explanation:

• CPI = EV / AC = ($1,200,000 * 0.35) / $600,000 = $420,000 / $600,000 = 0.70

• Estimate at Completion (EAC) = BAC / CPI = $1,200,000 / 0.70 = $1,714,285

• Estimate to Complete (ETC) = EAC - AC = $1,714,285 - $600,000 = $1,114,285

• Variance at Completion (VAC) = BAC - EAC = $1,200,000 - $1,714,285 = -$514,285

Given the current status of the construction project for building a new school in Kabul, Afghanistan, where the project is halfway through its timeline (6 months into a 12-month project), the team has spent $1,200,000 and completed 40% of the work, while the planned completion was 60%. The initial Budget at Completion (BAC) is $2,000,000. Calculations show that the Estimate at Completion (EAC) is $2,985,075, Estimate to Complete (ETC) is $1,785,075, and Variance at Completion (VAC) is -$985,075.

Based on this information, what is the right action that the project manager should take?

• Reassess the project plan and redistribute resources to accelerate work progress, aiming to meet the original schedule.

• Increase the project budget and add additional resources to speed up work and cover the higher expected costs.

• Conduct a detailed analysis to identify root causes of cost and schedule deviations, and then implement targeted corrective actions to improve performance indices.

• Adjust the project scope and extend the timeline to better align with the current spending and completion rate.

During an agricultural project aimed at improving irrigation systems in rural Afghanistan, the Budget at Completion (BAC) is $1,500,000, and the project duration is 10 months. By the end of month 5, the project has spent $900,000 and completed 30% of the work, while the planned completion was 50%. The calculations show that the Estimate at Completion (EAC) is $2,250,000, the Estimate to Complete (ETC) is $1,350,000, and the Variance at Completion (VAC) is -$750,000.

Based on this information, what is the right action that the project manager should take?

• Reevaluate the project scope and timeline to ensure alignment with the current spending and completion rate.

• Perform a root cause analysis to identify reasons for cost overruns and delays, then implement corrective actions to improve the project's performance indices.

• Continue with the current plan as the cost and schedule performance might stabilize over the remaining period.

• Allocate additional funds and resources to accelerate work progress and meet the original schedule.