Name: Wing Yam Chu Student ID: A00147460

DUE APRIL 4th:

Picture this: You’ve been working non-stop on a 4 month project with a budget
$4,000. Each month is expected to cost $1000

Then, you get a call from the client asking how far along you are with it. He
wants to know:
● Will you be able to deliver the project on time?
● How’s the actual cost looking like versus the budgeted cost?
● Will the project be completed within the budget?

Step 1: Planned value (PV)

To get the planned value, multiply the percentage of completed work

(planned) by the project’s budget (BAC).
PV = % complete (planned) x BAC
Using the example above, let’s calculate the planned value.
1. After 2 months
●
PV = % complete (planned) x BAC
WHATS THE PV: 50% x $4000 = $2000

2. After 3 months
WHATS THE PV: 75% x $4000 = $3000

Step 2: Actual cost (AC)

What’s the actual cost if you spent $750 after the first month even when
you’ve only completed 20% of the project?
Given:
● Project duration: 4 months
● Project budget (BAC): $4,000
● Elapsed time: 1 month
● % complete (planned): 25%
 ● % complete (actual): 20%
WHATS THE AC = $750

Step 3: Earned value (EV)

If your client asks you to stop all work on the project today, EV tells you the
value the project has generated, considering work done to date.
Earned value formula
To get the earned value, multiply the percentage of completed work (actual)
by the project’s budget (BAC).
EV = % complete (actual) x BAC
Let’s look at some examples:
1. You spent $750 after the first month and you only completed 20% of
the project.
Given:
● Project duration: 4 months
● Project budget (BAC): $4,000
● Elapsed time: 1 month
● Planned value: $1,000
● Actual cost: $750
● % complete (planned): 25%
● % complete (actual): 20%
EV = % complete (actual) x BAC
WHAT IS THE EV = 20% x $4000 = $800

2. You spent $2,500 after three months. All tasks scheduled for
completion up to this point have been completed.
Given:
● Project duration: 4 months
● Project budget (BAC): $4,000
● Elapsed time: 3 months
● Planned value: $3,000
● Actual cost: $2,500
● % complete (planned): 75%
● % complete (actual): 75%
EV = % complete (actual) x BAC
WHAT IS THE EV = 75% x $4000 = $3000