Category Archive

All articles in Project Cost Management category

What Is Burn Rate?

The burn rate is a project management metric assessing the performance of the project with respect to the budget. A burn rate bigger than 1 indicates that the project is burning money faster than it should, a burn rate less than 1 indicates that the project is burning money slower than it originally planned. Burn Rate = 1/CPI = AC/EV.


What Is the Difference Between Estimated Cost at Completion (EAC) and Actual Cost (AC)?

The difference between the Estimated Cost At Completion (sometimes mistakenly referred to as Estimated Cost) and the Actual Cost, is that the Estimated Cost At Completion is an estimate made by the Project Manager for accomplishing a task, an activity, or a project. The Actual Cost represents the costs incurred so far towards accomplishing that objective.


What Are the Earned Value Formulas?

Here are the different earned value formulas: CV = EV – AC, SV = EV – PV, CPI = EV / AC, SPI = EV / PV, EAC = BAC / CPI, ETC = EAC – AC, VAC = BAC – EAC