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 1. PERT (P + 4M + O )/ 6 Pessimistic, Most Likely, Optimistic 2. Standard Deviation (P – O) / 6 3. Variance [(P – O)/6 ]squared 4. Float or Slack LS-ES and LF-EF 5. Cost Variance EV – AC 6. Schedule Variance EV – PV 7. Cost Perf. Index EV / AC 8. Sched. Perf. Index EV / PV 9. Est. At Completion (EAC) BAC / CPI,AC + ETC — Initial Estimates are flawed AC + BAC – EV — Future variance are Atypical AC + (BAC – EV) / CPI — Future Variance would be typical 10. Est. To CompletePercentage complete EAC – ACEV/ BAC 11. Var. At Completion BAC – EAC 12. To Complete Performance Index TCPI Values for the TCPI index of less then 1.0 is good because it indicates the efficiency to complete is less than planned. How efficient must the project team be to complete the remaining work with the remaining money?( BAC – EV ) / ( BAC – AC ) 13. Net Present Value Bigger is better (NPV) 14. Present Value PV FV / (1 + r)^n 15. Internal Rate of Return Bigger is better (IRR) 16. Benefit Cost Ratio Bigger is better ((BCR or Benefit / Cost) revenue or payback VS. cost)Or PV or Revenue / PV of Cost 17. Payback Period Less is betterNet Investment / Avg. Annual cash flow. 18. BCWS PV 19. BCWP EV 20. ACWP AC 21. Order of Magnitude Estimate -25% – +75% (-50 to +100% PMBOK) 22. Budget Estimate -10% – +25% 23. Definitive Estimate -5% – +10% 24. Comm. Channels N(N -1)/2 25. Expected Monetary Value Probability * Impact 26. Point of Total Assumption (PTA) ((Ceiling Price – Target Price)/buyer’s Share Ratio) + Target Cost Sigma σ 1σ = 68.27% 2σ = 95.45% 3σ = 99.73% Return on Sales ( ROS ) Net Income Before Taxes (NEBT) / Total Sales ORNet Income After Taxes ( NEAT ) / Total Sales Return on Assets( ROA ) NEBT / Total Assets ORNEAT / Total Assets Return on Investment ( ROI ) NEBT / Total Investment ORNEAT / Total Investment Working Capital Current Assets – Current Liabilities Discounted Cash Flow Cash Flow X Discount Factor Contract related formulas Savings = Target Cost – Actual CostBonus = Savings x Percentage Contract Cost = Bonus + Fees Total Cost = Actual Cost + Contract Cost

F rom:http://pmzilla.com/formulas-pmp-pmp

# ormulas You Must Know

## Acroynyms Used in Formulas

 AC Actual Cost of the Work Performed BAC Budget at Completion (Project budget) CV Cost Variance CPI Cost Performance Index EAC Estimate at Completion ETC Estimate to Complete EV Earned Value (Budgeted Cost of the Work Performed) PV Planned Value (Budgeted Cost of the Work Scheduled) SV Schedule Variance SPI Schedule Performance Index VAC Variance at Completion

## Cost and Schedule Formulas

 CV = EV – AC SV = EV – PV CPI = EV / AC SPI = EV / PV

CV and SV are also known as progress formulas. CPI and SPI are also known as efficiency indicators.

CV (cost variance) measures money. SV (schedule variance) measures time. To get from CV to CPI or SV to SPI, just change the minus sign to a division sign. CPI and SVI are efficiency indicators.

With CV and SV, positive values are good (under budget, ahead of schedule). Similarly, with CPI and SPI, values greater than 1 are good.

Remember that in the cost and schedule formulas, EV is always the first value.

## Forecasting Formulas

 (simplest formula: typical or no variances) EAC = BAC / CPI (atypical variances) EAC = AC + (BAC – EV) (typical variances) EAC = AC + (BAC – EV) / CPI (atypical variances) ETC = BAC – EV (typical variances) ETC = (BAC – EV) / CPI

Note that the second formulation for EAC could be restated as

 EAC = AC + ETC

ETC (estimate to complete) measures work which is still outstanding.
EAC (estimate at completion) measures total work when the project is complete.
Both are calculated differently depending on whether the variances so far are typical or atypical.

## PERT Formulas for Activity Duration Estimating

 Activity Length = (P+4M+O) / 6 Activity Std. Dev = (P-O) / 6 Activity Variance = ((P-O) / 6)2

where P is the pessimistic estimate, O is the optimistic estimate and M is the most likely estimate.

The Activity Length formula is also known as the “three point estimate.”

Remember that you cannot simply add standard deviations; you must calculate variances (the standard deviation squared), sum them and then take the square root.

## Critical Path Formulas for Activity Duration Estimating

 Activity Duration = EF – ES or LF – LS Activity Float = LS – ES or LF – EF

Remember CPM is deterministic, using specific durations; PERT is probabilistic, using statistical estimates of durations.

## Quality Formulas (Normal Distribution)

 1 sigma = 68.26% 2 sigma = 95.46% 3 sigma = 99.73% 6 sigma = 99.99985%

## Financial Formulas

These formulas are used in budgeting and project selection.

 Payback period: number of years until the sum of future cash flows equals the initial investment.   ## Examples of using the financial formulas

• Payback Period: Obviously this is an extremely rough calculation which does not take into account the time value of money. If the initial investment is \$10,000, and the cash flows are:
 Year Amount (FV) 1 \$2000 2 \$2000 3 \$2000 4 \$2000 5 \$2000 6 \$2000 7 \$2000 8 \$2000

then the payback period is 5 years.

• PV: The present value is the discounted value of a future cash flow. A “discount” is required because the present value of money is greater than the future value of money. It is expressed:
PV = FV/(1 + r)n, where r is the interest rate (or cost of capital) and n is the years.

What is the present value of an investment which pays \$10,000 five years from now with an interest rate of 10% ?
\$10,000 / (1 + .1) 5 = \$6209.

• NPV: The net present value is the sum of all future discounted cash flows. Using the calculations from the payback period example, and assuming a 10% cost of capital,
 Year Amount (FV) PV 1 \$2000 \$1818 2 \$2000 \$1653 3 \$2000 \$1503 4 \$2000 \$1366 5 \$2000 \$1242 6 \$2000 \$1129 7 \$2000 \$1026 8 \$2000 \$933

So the present value of the next 8 years of cash flows is \$10,670.

Also remember NPV is *net*, so if there is an initial investment, it must be subtracted. In other words, if this investment cost \$10,000, the NPV would be \$670, not \$10,670.

• IRR – the Internal Rate of Return is the discount rate when the present value of cash flows is the same as the initial investment. Higher IRRs are preferred to lower ones. IRR is determined by trial and error, computing NPV with various interest rates.

## Other Formulas

 EV = (% complete) * BAC VAC = BAC – EAC Communication Channels = (N * (N-1)) / 2 [where N is the number of parties] Overhead rate = (charge rate per hour – pay rate per hour) / pay rate per hour

## Old Acroynms

 BCWP Budgeted cost of work performed – old term for EV BCWS Budgeted cost of work scheduled – old term for PV ACWP Actual cost of work performed – old term for AC

You probably won’t need to know these but they’re here for reference.
http://www.pmpexamguide.com/formulas.html