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22. Present Value (PV) Formula: PV = Future Value / (1 + i)n Present Value (PV) considers the time value of money. This is useful to calculate what a future amount of money would mean today if adjusted for time. ‘i’ represents the interest rate or the discounting rate. ‘n’ represents t...
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19. Return on Investment (ROI) Formula: ROI = (Net Profit / Cost of Investment) x 100 Return on Investment is the measurement of the rate at which the amount invested in a project gets recovered. This is expressed as a percentage. If net profit is $2000 and the Cost of Investment is ...
16. Cost plus Fixed Fee Formula: Cost plus Fixed Fee = Cost + n This is done in a contract where the buyer agrees to pay all the costs plus a pre-decided amount to the seller. ‘n’ stands for the fixed amount that is to be paid apart from the costs. With the cost at 50 and ‘n’ at 5 that...
13. Standard Deviation Formula: Standard Deviation (σ) = (Pessimistic – Optimistic) / 6 Standard Deviation expressed by the character ‘ σ’ represents the degree to which the values can change within a project. Let's imagine a task that takes 4 days to complete in the best case and 16 d...
10. Variance at Completion Formula: Variance at Completion = Budget at Completion – Estimate at Completion Variance at Completion calculates how much the project budget is accurate to the planned budget. This will help you to plan and estimate requirements more accurately. If ...
1. Beta Value in PERT Formula: Beta = (Pessimistic + 4 Most Likely + Optimistic) / 6 Beta value in PERT (Program Evaluation and Review Technique) is a weighted average taken from three values. Optimistic Value, Most Likely Value, and Pessimistic Value. Suppose a task takes 5 days to fi...
7. Cost Performance Index (CPI) Formula CPI = Earned Value / Actual Cost The Cost Performance Index measures the cost efficiency of the project in utilizing the funds invested in it. It is calculated through dividing earned value by actual cost. A higher CPI means that you are exce...
Purpose Formula Description Calculate Beta Value in PERT (Program Evaluation and Review Technique) Beta = (Pessimistic + 4 Most Likely + Optimistic) / 6 This equation finds the expected value by giving weightage to the most likely Value. Calculate Estimated Monetary ...
4. Earned Value Formula: EV = % Complete x Budget at Completion Earned Value estimates the amount of work done in terms of monetary value. It is calculated by multiplying the percentage of work completed and the project value represented by budget at completion. If the Bu...