Learn how to read earned value metrics in AI projects. Understand how PV, EV, and AC reveal whether a project is behind schedule and over budget.
Question
Table of Contents
You’re managing an AI retail project. At month 4, the dashboard shows:
PV = $400 000
EV = $350 000
AC = $420 000
What is the project’s status?
A. On schedule, under budget.
B. Behind schedule, over budget.
C. Ahead of schedule, over budget.
D. Ahead of schedule, under budget
Answer
B. Behind schedule, over budget.
Explanation
The project is behind schedule and over budget.
Here is why:
Planned Value (PV) = $400,000
This is the amount of work that should have been completed by month 4.
Earned Value (EV) = $350,000
This is the value of the work actually completed by month 4.
Actual Cost (AC) = $420,000
This is how much the project has actually spent to complete that work.
Schedule status
To check schedule performance, compare EV with PV:
EV ($350,000) < PV ($400,000)
This means the project has completed less work than planned at this point. In simple terms, it is behind schedule.
You can also confirm this with Schedule Variance (SV):
SV = EV – PV
SV = 350,000 – 400,000 = -50,000
A negative schedule variance shows delay.
Cost status
To check cost performance, compare EV with AC:
EV ($350,000) < AC ($420,000)
This means the project has spent more money than the value of the work completed. That indicates it is over budget.
You can also confirm this with Cost Variance (CV):
CV = EV – AC
CV = 350,000 – 420,000 = -70,000
A negative cost variance means overspending.
Final assessment
The dashboard shows two problems at the same time:
Less work completed than planned
More money spent than the value earned
That makes the correct choice:
B. Behind schedule, over budget.
Quick formula recap
If EV < PV → behind schedule
If EV > PV → ahead of schedule
If EV < AC → over budget
If EV > AC → under budget
In this case:
350,000 < 400,000 → behind schedule
350,000 < 420,000 → over budget
So the project is clearly behind schedule and over budget.