CAPM (Certified Associate in Project Management) Practice Exam

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What does a positive Cost Variance (CV) indicate?

Costs are exactly as budgeted
Costs are overrun
Costs are below budget
The project is ahead of schedule

The correct answer is: Costs are below budget

A positive Cost Variance (CV) indicates that costs are below budget. This means that the project is costing less than what was originally planned, which is generally considered favorable as it can contribute to overall project cost savings. "Costs are exactly as budgeted" (Option A) is not indicative of a positive Cost Variance, as it implies that there is no variance between the planned and actual costs. "Costs are overrun" (Option B) suggests a negative Cost Variance, meaning costs are exceeding the budget. "The project is ahead of schedule" (Option D) refers to Schedule Variance (SV) rather than Cost Variance, so it is not the correct interpretation in this context.