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Understanding how to calculate key project management metrics is essential for tracking project performance. The Earned Value (EV), Actual Cost (AC), and Budget at Completion (BAC) are fundamental indicators used to assess project progress and financial health.
Calculating Earned Value (EV)
Earned Value represents the value of work actually performed up to a specific point in time. It is calculated by multiplying the percentage of work completed by the total budget for that work.
Formula: EV = % of work completed × BAC
Calculating Actual Cost (AC)
Actual Cost is the total expenditure incurred for the work performed during a specific period. It is a straightforward sum of all costs associated with the work completed.
Calculating Budget at Completion (BAC)
Budget at Completion is the total planned budget for the entire project. It is established during project planning and remains constant unless there are scope changes.
In summary, the key formulas are:
- EV = % of work completed × BAC
- AC = sum of actual costs incurred
- BAC = total project budget