PMP FORMULAS

Present Value (PV)

PV=FV/(1+R)^n

The result - amount of money to invest today(PV) for n years at r % interest in order to endup with the target sum (FV- Future Value).Bigger the better

Payback Period

Net Investment / Average Annual Cash Flow

Length of time it takes the company to get back the initial cost of producing a product/service.Shorter the better

Benefit Cost Ratio

BCR =(Revenue/ Cost)

Cost Benefit Analysis. Bigger the better

TCPI(ECA)

(BAC - EV) / (EAC - AC)

Values for the TCPl index of less than 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?

Sharing Ratio

Y%/ Z% (eg. 80%/20%)

How cost savings or overrun will be shared Y%- buyer's share ratio & & Z%- - seller's share ratio

PV

(P%C) * BAC

P%C-Planned % Complete.
PV is also called BCWS.

EV

(A%C)*BAC

A%C-A ctual % Complete.
EV is also called BCWP.

CPI

EV/AC

CPI> 1, Efficiency in utilizing the resources allocated to the project is good<1, Efficiency in utilizing the resources allocated to the project is bad

ETC

EAC-AC

A more accurate way is to re-estimate cost of the remaining work from the bottom-up.

TCPI(BAC)

(BAC-EV) / (BAC- AC)

Values for the TCPI index of less than 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?

Economic Value Add Benefit Measurement

EVA= Net Operating Profit After Tax
Cost of Capital - (Investment
Capital X % Cost of Capital)

Cost of Capital = (Revenue Op. Exp Taxes). Bigger the better

Net Present Value (NPV)

The PV of the total benefits
(income or revenue) less the costs.

NPV is a much more precise capital budgeting method than payback period. bigger the better

Return on Invested Capital

Net Income (after tax) from proj/ Total Capital invested in the project

Bigger the better

Final Price (FP)

Actual Fee (AF)= TF +Z% * (TC-AC)

Working Capital

Current Assets - Current Liabilities

Standard Deviation

(P - O)/65

Activity Duration

(EF- ES) or (LF- LS)

Actual Fee (AF)

(P-O)/6^2

Triangular Distribution /3P Estimate

(P +M + O)/3

Return on Assets (ROA)

NIBT/Total Assets (OR) NIAT/ Total Assets