The cost performance index (CPI) is a calculation that compares the amount budgeted for the project (expected value or EV) to the amount spent on the project (actual cost or AC) to the The formula for the cost performance index is CPI=EV/AC. If the value is one (1), then the project is exactly on budget. When the value is greater than 1 (>1), the project is running under the planned cost. When the value is less than 1 (<1), the project is running over budget. By calculating the CPI, the project manager can track how the project is tracking against the budget.

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