Formula Mastery & Project Glossary

Master the "Hard Science" of project management. This appendix covers every mathematical formula and technical definition required for the 2026 PMP Exam.

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📊 Earned Value Management (EVM)

EVM is the most critical math section of the exam. If you master these 4 metrics, you can derive almost everything else.

The InputPV (Planned Value)

PV = % Planned × BAC

What you should have done by now according to the schedule.

The InputEV (Earned Value)

EV = % Actually Done × BAC

The budgeted value of the work actually completed.

The InputAC (Actual Cost)

AC = Total Spent

What you have actually paid to date.

EfficiencyCPI (Cost Index)

CPI = EV / AC

> 1.0 = Under Budget
< 1.0 = Over Budget

EfficiencySPI (Schedule Index)

SPI = EV / PV

> 1.0 = Ahead of Schedule
< 1.0 = Behind Schedule

ForecastingEAC (Projected Cost)

EAC = BAC / CPI

Predicts a final project cost if current efficiency continues.

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📐 Estimation & Schedule Math

Beyond EVM, these formulas help you calculate certainty and communication complexity.

EstimationPERT (Three-Point)

(O + 4M + P) / 6

Weighs the "Most Likely" outcome 4x to account for uncertainty.

CommunicationChannels

N(N-1) / 2

Calculates the number of potential communication paths for N people.

ScheduleTotal Float

LS - ES or LF - EF

The amount of time a task can be delayed without delaying the project.

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💰 Financial Selection Metrics

Used during Initiation (Chapter 5) to choose the right project.

Metric	Rule of Thumb	Why?
NPV (Net Present Value)	Higher is Better	The total value in today's dollars.
IRR (Internal Rate of Return)	Higher is Better	The effective "interest rate" the project earns.
BCR (Benefit Cost Ratio)	> 1.0 is Good	For every $1 spent, you get >$1 back.
Payback Period	Shorter is Better	How fast you recover the initial investment.

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📖 Global Glossary (A-Z)

A - Adaptive to Artifact

• Adaptive: A project approach that is iterative or agile; responds to change.
• Artifact: Any document, template, or deliverable used to manage the project.
• Assumption: A factor held to be true for planning purposes without proof.

B - Backlog to Baseline

• Backlog: A prioritized list of work items (User Stories).
• Baseline: The approved version of a plan (Scope, Schedule, or Cost).
• Business Case: The economic justification for the project.

C - Change to Constraint

• Change Control: The process of reviewing and approving changes to baselines.
• Constraint: A limiting factor (Fixed deadline, budget cap).
• Critical Path: The longest sequence of tasks with zero float.

E - ESG to EVM

• ESG: Environmental, Social, and Governance criteria for sustainability.
• EVM: Earned Value Management; a method of measuring performance via math.

R - RACI to Risk

• RACI: Responsible, Accountable, Consulted, Informed matrix.
• Risk: An uncertain event that, if it occurs, has a positive or negative impact.

V - Value to Velocity

• Value: The net result of benefits minus costs.
• Velocity: The rate at which an agile team completes story points.