If future work will continue at the current CPI, which formula represents EAC?

• A. EAC = BAC / CPI
• B. EAC = AC + (BAC − EV)
• C. EAC = AC + BAC
• D. EAC = BAC − EV

Answer: (A)

The main idea here is how to forecast total project cost when future work is expected to proceed with the same cost efficiency shown so far. EAC, or estimate at completion, represents the total expected cost of finishing the project. If the future work will be performed at the current cost performance index (CPI), you apply that same CPI to the entire budget, not just the remaining work. That gives EAC as BAC divided by CPI. In other words, you’re scaling the total budget by how efficiently cost is being spent right now: a CPI below 1 means costs will run higher than budgeted, raising EAC above BAC; a CPI above 1 means costs will be under budget, lowering EAC below BAC. For example, if BAC is 1000 and CPI is 0.8, EAC would be 1000 / 0.8 = 1250.

The other formulas assume different future performance scenarios: one adds remaining work at the original budgeted rate (ignoring the current CPI), another adds remaining work without applying CPI at all, and a third combines past cost with remaining budgeted cost in a way that doesn’t reflect continuing at the current CPI.