CAPM (Certified Associate in Project Management) Practice Exam

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What does a CPI less than 1.0 indicate?

Project is ahead of schedule
Costs are on budget
Costs are over budget
Project is on schedule

The correct answer is: Costs are over budget

A CPI (Cost Performance Index) less than 1.0 indicates that the costs of the project are over budget. This means that the actual costs incurred on the project are higher than what was planned or budgeted for. It shows that the project is not performing well in terms of cost control and that corrective actions may be needed to bring the project back on track financially. In contrast: - If the project is ahead of schedule, the CPI would typically be higher than 1.0. - If costs are on budget, the CPI would be exactly 1.0. - If the project is on schedule, the CPI could be at, above, or below 1.0, depending on cost performance relative to the schedule.