Planned Value (PV)

5 minutes 5 Questions

Planned Value, often called Budgeted Cost of Work Scheduled (BCWS), is the cost allocated for the scheduled work to be completed at any given point in time. In other words, it is the estimated value of the project tasks that should have been completed. It helps project managers to determine if project cost and schedule are progressing as planned. PV sets the baseline against which the actual costs (AC) and earned value (EV) will be compared.

Guide: Understanding and Answering Questions on Planned Value (PV)

What is Planned Value (PV)?
Planned Value (PV), sometimes also known as Budgeted Cost of Work Scheduled (BCWS), is a fundamental concept in Earned Value Management (EVM). It represents the amount of work that should have been achieved as per the schedule and the corresponding budget allocation for that work.

Why is it Important?
Understanding PV is crucial as it provides insight into the planned cost of the project at any time. It can help in monitoring the project's progress and its adherence to the budget, thereby enabling efficient resource allocation and financial management.

How it Works?
PV is calculated using the formula: PV = (Planned percent complete) x (Total Budget). It involves metrics about the tasks that were planned to be achieved at any given point and their associated budgeted costs.

Answering Questions on PV in an Exam
When answering PV questions in an exam, remember to always refer back to the PV formula. Identify the planned percent completeness and the total budget from the question and substitute in the formula to get the PV. For comparative questions, calculate the PV for each situation and then compare to answer.

Exam Tips: Answering Questions on Planned Value (PV)
1. Remember the PV formula: PV = (Planned percent complete) x (Total Budget).
2. In case the question revolves around comparison of PVs in different scenarios, calculate PV for each scenario separately first.
3. In questions involving other EVM metrics, look for relationships between PV, Earned Value (EV), and Actual Cost (AC) as required.
4. Always re-check your calculations.
5. Be careful with units and conversion factors if the budget and planned completeness are given in different units.

Test mode:

Exam (Timed)

Practice (With explanations)

Start practice test

Question 1

Your project budget is divided equally over 4 quarters of the year, amounting to $200,000. It's already into the third quarter, what would be the Planned Value (PV)?

$200,000 $100,000 $150,000 $50,000

Correct Answer: $150,000

The total project budget is $200,000 and is divided equally over 4 quarters, which means each quarter receives $50,000. If we are already in the third quarter, it means we have two quarters behind us. Therefore, the Planned Value (PV), which is the authorized budget assigned to the scheduled work, would be the budget of these two quarters plus the current one. Hence, $50,000 (for the first quarter) + $50,000 (for the second quarter) + $50,000 (for the third quarter) equals $150,000. The answer '$100,000' only sums up the budget for the first two quarters while '$50,000' only accounts for one quarter. The answer '$200,000' would only be correct if we were in the fourth quarter, but we are in the third, so it is incorrect.

Question 2

You are managing a three-month project, where each month has allocated a budget of $40,000. It is the second month of your project, what is the Planned Value (PV)?

$40,000 $60,000 $100,000 $80,000

Correct Answer: $80,000

Planned Value (PV) is the estimated value of the work scheduled to be done. In this case, the project is budgeted at $40,000 per month. Since it's the second month, the work planned so far (i.e., the PV) should be the sum of the first month and the second month's budget. Therefore, PV is $40,000 (for the first month) + $40,000 (for the second month) = $80,000. The other options are incorrect: $60,000 implies the PV for one and a half month, $100,000 is the PV for two and a half months, and $40,000 would only be correct if it was the first month.

Question 3

The project you are managing has passed one of its key milestones ahead of schedule. The completed work so far is worth $200,000, however, the value of the work that was planned to complete by this date was $250,000. What is the Planned Value (PV)?

Cannot be calculated $50,000 lagging behind the planned cost $250,000 $200,000

Correct Answer: $250,000

The Planned Value (PV) refers to the value of work that was planned to complete by a given date. In this case, the project had planned to complete work worth $250,000 by the milestone date. This remains the planned value even though the actual work completed is worth $200,000. Answer 150025 is incorrect as it refers to the worth of the work that has been actually completed, not planned. Answer 150027 is incorrect as it calculates a deficit which has no relation to the concept of Planned Value. Answer 150029 is incorrect because there is enough information to calculate the Planned Value.

Launch Your Project Management Career

CAPM practice aligned with PMI's ECO

More Planned Value (PV) questions

12 questions (total)

Start 12 question test