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20 Cards in this Set
- Front
- Back
Cost Estimating
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IN: WBS, Scope Statement
OUT: Activity Cost Estimates |
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Cost Budgeting
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IN: Activity Cost Estimates
OUT: Cost Baseline |
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Cost Control
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IN: Cost Baseline
OUT: Cost Updates, Baseline Updates, Corrective Action |
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Time Value of Money
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Money that we spend today is more expensive than money we will spend 3 years from now.
PV = FV / (1+r)^n |
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Net Present Value
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Allows comparison of projects with very different budgets, durations, benefits.
Difference between present value of value of cash inflows and present value of cash outflows. |
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Payback Period
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Number of periods it takes to equate to the project cost.
$3,000 cost of project that provides $1000 per year benefit. Period here is 3 years. |
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Internal Rate of Return (IRR)
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Calculate financial alternatives based on interest rate of cash inflows and outflows.
Highest IRR is preferred. |
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EV
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Earned Value
Value of work actually completed. Multiply the % complete by the cost baseline to get the value of what we've done so far. |
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PV
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Planned Value
Value of work and planned to be completed. Comes from the Cost Baseline. (we dont know the value of the work or how much is complete) |
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AC
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Actual Cost
What actual costs that have incurred. (we know the completion of work done and its value) |
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EAC
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Estimate at Completion
BAC/CPI What we think we will actually spend when the project is done. |
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CPI
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Cost Performance Index
EV/AC Less than 1 means bad, means project cost (AC) more its value (EV). |
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CV
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Cost Variance
EV-AC Less than 1 means bad, means project cost (AC) more its value (EV). |
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SV
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Schedule Variance
EV-PV Less than 1 means bad, means our current completion (EV) is less than planned (PV). |
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SPI
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Schedule Performance Index
EV/PV Less than 1 means bad, means our current completion (EV) is less than planned (PV). |
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Standard Deviation
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(P-O)/6
Gives the confidence level at which we can give an estimate. Greater the number, the greater the distance between estimates and the greater the risk. |
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Cost Baseline
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Lists amount to spend on every WBS entry in every day of the project.
Also allows you to calculate how much value we should have created by a certain date (the heart of EV). |
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BAC
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Budget at Completion
Total approved budget for project |
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Variance at Completion
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BAC-EAC
Zero is the best result. |
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Time Value of Money
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PV = FV / (1+r)^n
r=interest rate n=time in periods What money we spend now, what is it worth in the future. Good calculation for projects whose expenses are well in the future. |