Description 
Formula 
Comments 
NPV 
Present value of benefit  present value of cost 
Method for financial evaluation for long term projects. +ve NPV is good, ve NPV is bad The project with higher NPV is better project. 
# of channel of communication 
N(N1)/2 
where N is the number of project members 
PERT 

(Program Evaluation & Review Technique) 
EAD (Expected Activity Duration) 
[P + O + 4M]/6 
O= Optimistic, M = Most Likely, P = Pessimistic You use the PERT calculation (P + 4M + O)/6 to compute a weighted average of the totals. This number represents the mean (or 50 percent point) 
SD (Activity Standard Deviation) 
[PO]/6 

Activity Variance 
[(PO)/6]^{2} 
Standard Deviation Squared 
Standard Deviation Squared 
EAD +/ SD 
Start of Range = EAD  SD, End of Range = EAD + SD 
Range for an overall project 
Project EAD +/ Project SD 
Project EAD = Sum of all individual activity EAD on critical path Project SD = √Sum of all individual activity variances (√=Square root) 
Float Activity on critical path has 0 or no float 
Late Start  Early Start Late Finish  Early Finish 
Both formula returns the same result If network diagram has only two paths then the difference between the two paths is the float 
EV (Earned Value) 
Estimated value of work actually accomplished 
Cost to date as per the original baseline (if there are variance don't include those). EV is the cost incurred to date if we would have worked as per baseline. 
CV (Cost Variance) 
EV  AC 
ve = Above Budget = Bad, +ve = Under Budget = Good 
SV (Schedule Variance) 
EV  PV 
ve = Behind Schedule = Bad, +ve = Ahead Schedule = Good 
CPI (Cost Performance Index) 
EV/ AC 
= 1 = Good = On Target, > 1 = Good , <1 = Bad 
SPI (Schedule Perf Index) 
EV/PV 
= 1 = Good = On Target, > 1 = Ahead Schedule , <1 = Behind Schedule If project is close & SPI is <1 means the project got terminated 
EAC (estimate at completion) 
1) AC + ETC 2) BAC/CPI 3) AC + (BACEV) 
There are many ways to calculate EAC 1) Actual + new estimate for remaining work. This is used when the original estimate is fundamentally flawed. 2) This formula is used if no variances from the BAC have occurred or you continue with the same rate of spending. 3) Actual to date + remaining budget. 
TCPI (To Complete Performance Index) 
(BACEV) / (BAC  AC) 
Work remaining to do divided by the money remaining to do. 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? It answers the question "In order to remain within the budget what rate must be met for the remaining work?" 
ETC (Estimate to Complete) 
(EACAC) 
How much more does the project cost? ReEstimate is the estimate from bottoms up 
VAC (Variance at Completion) 
BAC  EAC 
How much under or over budget will be at the end of the project 
Median 

The middle value that separates the higher half from the lower half of data. Exam: 4 is the median in 2,4,6 (middle value) 5 is the median in 2,4,6,8 ([4+6] /2) 
Mode 

The most frequent value in a given data set. Exam: 2 is the mode of 1,2,2,3 
EMV (Expected Monetary Value) 
P(Probability) * I (Impact) 
P = Probability , I =Impact 
PTA (Point of Total Assumptions)  Procurement 
PTA= ([Ceiling Price  Target Price] / Buyers Share Ratio) + Target Cost 
Refers to the amount above which the seller bears all the loss of a cost overrun 
Est. To Complete (Percentage) 
EV/ BAC 

Present Value PV 
FV / (1 + r)^n 

Internal Rate of Return 
Bigger is better (IRR) 

Benefit Cost Ratio 

Bigger is better ((BCR or Benefit / Cost) revenue or payback VS. cost) Or PV or Revenue / PV of Cost 
Payback Period 
Net Investment / Avg. Annual cash flow. 
Less is better 
Sigma σ 
 1σ = 68.27%
 2σ = 95.45%
 3σ = 99.73%
6σ = 99.99985% 

Return on Sales ( ROS )


Net Income Before Taxes (NEBT) / Total Sales OR Net Income After Taxes ( NEAT ) / Total Sales 
Return on Assets( ROA ) 
NEBT / Total Assets OR NEAT / Total Assets 

Return on Investment ( ROI ) 
NEBT / Total Investment OR NEAT / Total Investment 

Working Capital 
Current Assets  Current Liabilities 

Discounted Cash Flow 
Cash Flow X Discount Factor 

Contract related formulas 

Savings = Target Cost  Actual Cost Bonus = Savings x Percentage Contract Cost = Bonus + Fees Total Cost = Actual Cost + Contract Cost 