What does EAC stand for, and what are common methods to forecast final cost and duration?

What does EAC stand for, and what are common methods to forecast final cost and duration?

• A. EAC stands for Estimate at Completion. Common methods include BAC / CPI and AC + BU-ETC.
• B. EAC stands for Estimated At Completion; uses PV to forecast end date.
• C. EAC stands for Earned At Completion; it uses EV and PV.
• D. EAC stands for Estimate at Completion and is always equal to AC plus EV.

Answer: (A)

EAC stands for Estimate at Completion. It’s the forecasted total cost to complete all project work from the present moment. Two common ways to calculate it are widely taught. First, use BAC divided by CPI when you expect the current cost performance to continue for the remaining work. Here, CPI (cost performance index) is EV divided by AC, and BAC is the total budget at completion. If cost performance remains the same, dividing the total budget by the cost efficiency you’re currently experiencing gives you the expected final cost. For example, a CPI of 0.8 means you’ll likely exceed the budget, and EAC becomes 1.25 times BAC, signaling overruns. Second, use AC plus Bottom-Up ETC. This adds the actual cost to date to a detailed estimate of the remaining work. ETC (estimate to complete) is built from a bottom-up assessment of what remaining tasks will cost, and adding it to the incurred cost (AC) yields a fresh forecast of total project cost. The other options mix nonstandard terms or incorrect formulas (for instance, EAC is not simply AC plus EV, and PV isn’t used to forecast final cost in this context), so they don’t represent the typical and accepted ways to estimate final cost.

EAC stands for Estimate at Completion. It’s the forecasted total cost to complete all project work from the present moment. Two common ways to calculate it are widely taught.

First, use BAC divided by CPI when you expect the current cost performance to continue for the remaining work. Here, CPI (cost performance index) is EV divided by AC, and BAC is the total budget at completion. If cost performance remains the same, dividing the total budget by the cost efficiency you’re currently experiencing gives you the expected final cost. For example, a CPI of 0.8 means you’ll likely exceed the budget, and EAC becomes 1.25 times BAC, signaling overruns.

Second, use AC plus Bottom-Up ETC. This adds the actual cost to date to a detailed estimate of the remaining work. ETC (estimate to complete) is built from a bottom-up assessment of what remaining tasks will cost, and adding it to the incurred cost (AC) yields a fresh forecast of total project cost.

The other options mix nonstandard terms or incorrect formulas (for instance, EAC is not simply AC plus EV, and PV isn’t used to forecast final cost in this context), so they don’t represent the typical and accepted ways to estimate final cost.