# PMP Formulas

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1. Variance
Plan - Acutal
2. Communication Channels
[N X (N-1)]/2 where N = number of team members
3. PERT e(t)
(O + 4M + P) / 6
4. PERT sigma
(P-O) / 6
5. Three Point e(t)
(O + M + P) / 3
6. PV (Present Value)
• The value today of future cash flow
• Payment today is worth more than payment tomorrow
• Cost today is worth more than cost tomorrow

PV = Vt / (1 + i)t

Vt = the amount of cash flow "t" time periods from now

i = interest rate

t = time period

ex:

• PV = 500 / (1 + .05)12
• PV = 500 / 1.796
• PV = 278.39
7. BCR
• Benefit
• Cost
• Ratio

Revenues / Costs

• 1.0 = Break even
• > 1 = Profitable
• < 1 = Loss
8. TC
Total Cost

Fixed Cost + Variable Cost
9. EV
Earned Value: Analysis of the project's schedule and financial progress as compared with the original plan.

aka BCWS - Budgeted Cost of Work Performed

cost analysis is performed by measuring Actuals v. Planned
10. AC
Actual Cost - aka ACWP - Actual Cost of Work Performed
11. PV (Planned Value)
The total cost of work packages planned to be completed at a given point on schedule. Used to measure schedule variances.
12. CV
Cost Variance

EV-AC

Negative Variance = cost overrun
13. SV
Schedule Variance

EV-PV (negative variance is behind schedule)
14. CPI
Cost Performance Index

EV / AC

Less than one is a cost overrun
15. SPI
Schedule Performance Index

EV / PV

Less than one is behind schedule
16. EAC
Estimate at Completion

• BAC / CPI
• if variances are typical of future performance

• AC + (BAC-EV)
• if variances are not typical of future performance

• AC + [(BAC-EV) / (CPI x SPI) )]
• considers cost and schedule
17. ETC
Estimate to Complete

• EAC - AC
• if variances are typical

• BAC - EV
• if variances are atypical
18. VAC
Variance at completion

BAC - EAC
19. TCPI
To Complete Performance Index

• (BAC - EV) / (BAC - AC)
• or
• (BAC-EV) / (EAC-AC)
20. Percent Complete
EV / BAC
21. Percent Spent
AC / BAC
22. Percent Complete Rule
EV = %complete x PV
23. 50-50 rule
EV = 50% x budget (take 50% remaining at completion)
24. Percent Complete (total project)
EV = % complete of entire budget x BAC
25. Acronym - PV
BCWS - Budgeted Cost of Work Scheduled
26. Acronym EV
BCWP - Budgeted Cost of Work Performed
27. Acronym AC
ACWP - Actual Cost of Work Performed
28. Sigma
• Plus or Minus One Sigma = 68.3%
• Plus or Minus Two Sigma = 95.5%
• Plus or Minus Three Sigma = 99.7%
• Plus or Minus Six Sigma = 99.9997%
29. EMV
Expected Monetary Value

Amount at Stake x Probability
30. Decision Tree (probability of a path)
Multiply probabilities along the path
31. Probability of Event A not happening
1 - Probability of A happening
32. Probability A & B
Probability A x Probability B
33. Point of Total Assumption (PTA)
PTA = [(Ceiling Price - Target Price) / Buyer Share] + Target Cost