Learn Finance · Project & Cost Finance · Task A5. Turn today's CPI/SPI into the projected final cost — and the efficiency you'd need to still land on budget.

Drill the EAC/TCPI formulas in PMP Reps → Finance · Cost & EVM.

What it is

Once you have EVM numbers (A4), you can forecast the finish:

EAC — Estimate at Completion: the expected total cost. Four forms, depending on what you believe about the remaining work:

Assumption	EAC formula
Current cost efficiency continues (the usual)	BAC ÷ CPI
The overrun was a one-off; rest goes to plan	AC + (BAC − EV)
The plan is broken — re-estimate the rest	AC + bottom-up ETC
Both cost and schedule drag the rest	AC + [(BAC − EV) ÷ (CPI × SPI)]

ETC — Estimate to Complete: the cost still to spend = EAC − AC.
VAC — Variance at Completion: the forecast over/under at the end = BAC − EAC.
TCPI — To-Complete Performance Index: the efficiency the remaining work must hit to still finish on budget = (BAC − EV) ÷ (BAC − AC).

Why it matters

A forecast is a decision tool. "We'll finish at $2.35M against a $2.0M budget" prompts action now — descope, add funds, or re-plan — while there's still time.
TCPI is a reality check. If you've been running at CPI 0.85 and TCPI says the rest must run at 1.15, that's a judgment call: is a sudden efficiency jump credible, or do you need a new budget?
It replaces hope with maths. "We'll make it up later" is a wish; EAC is a number.

Where you do it in VanillaPM

Everything below is in Project → Control → Overview (apps/budget/evm.py), alongside the EVM indices (A4). A step-by-step:

Start from the same PV/EV/AC/BAC. The forecast reuses the earned-value inputs — no new data entry.
Read the EAC variants. derive_forecasts(pv, ev, ac, bac) returns every Estimate at Completion — the optimistic AC + (BAC − EV), the CPI-based BAC ÷ CPI, and the cost-and-schedule AC + (BAC − EV) ÷ (CPI × SPI) — so you can see the range, not one guess.
Read ETC and VAC. ETC (Estimate to Complete) is what's left to spend; VAC (Variance at Completion = BAC − EAC) is whether you'll land over or under the budget.
Check the recovery bar — TCPI. The dashboard shows the forecast against the BAC and the TCPI (To-Complete Performance Index): the efficiency the remaining work must hit to still finish on budget. A TCPI well above 1.0 is the honest "we can't claw this back" signal.
Add the time view. derive_earned_schedule adds the earned-schedule read — the schedule analogue of EVM — so "when will we finish?" gets the same evidence-based answer.

Walked example — Meridian

From A4: BAC $2,000,000 · EV $850,000 · AC $1,000,000 · CPI 0.85.

Metric	Calc	Result
EAC (CPI continues)	BAC ÷ CPI = 2,000,000 ÷ 0.85	$2,352,941
ETC	EAC − AC = 2,352,941 − 1,000,000	$1,352,941
VAC	BAC − EAC = 2,000,000 − 2,352,941	−$352,941 (overrun)
TCPI (to hit BAC)	(BAC − EV) ÷ (BAC − AC) = 1,150,000 ÷ 1,000,000	1.15

So at today's rate Meridian finishes ~$353k over, and to still hit $2.0M the remaining work would have to run at 1.15 — after running at 0.85 all year. That gap is the sponsor conversation: fund the overrun, cut scope, or justify why efficiency will suddenly jump.

The numbers

The most-used forecast is EAC = BAC ÷ CPI — it simply says "if we keep buying work at this efficiency, here's the total." TCPI > 1.0 means the rest must run harder than planned — and a TCPI far above the CPI you've actually achieved is usually a sign the BAC is no longer realistic (switch the TCPI denominator to the approved EAC).

Controls & assurance

The right EAC variant for the situation — don't default to BAC÷CPI if a change broke the plan.
EAC reported with its TCPI — the forecast and the efficiency it implies.
A forecast reconciled to the baseline + reserves — an EAC over BAC is a draw on reserve or a change request, made explicit.
The trend in EAC tracked, not just a single reading.

Best practices & pitfalls

Do pick the EAC formula that matches reality — one-off overrun vs systemic vs broken plan.
Do treat a TCPI that's wildly above your historical CPI as a red flag, not a target.
Pitfall: "we'll recover it later" with no plan. If CPI has been 0.85 for months, assuming 1.15 for the rest needs a concrete reason.
Pitfall: quietly moving to EAC as the new baseline. The baseline changes only through change control; EAC is a forecast, not a re-baseline.

Practise question

Q1. BAC = $1,000,000, EV = $400,000, AC = $500,000. Give EAC (assuming CPI continues), VAC, and the TCPI to still hit BAC — and say whether that TCPI is realistic.

Answer: CPI = 400/500 = 0.8 → EAC = 1,000,000 ÷ 0.8 = $1,250,000; VAC = 1,000,000 − 1,250,000 = −$250,000; TCPI = (1,000,000 − 400,000) ÷ (1,000,000 − 500,000) = 600/500 = 1.2. Running at 0.8 so far but needing 1.2 for the rest is a 50% efficiency jump — rarely realistic; the BAC is probably no longer viable.

Terms used here

EAC — estimate at completion (expected total cost); four variants.
ETC — estimate to complete (cost still to spend) = EAC − AC.
VAC — variance at completion = BAC − EAC.
TCPI — to-complete performance index; the efficiency the remaining work must hit.
Related: Measure performance with Earned Value — the CPI/SPI these forecasts are built on.

What the sponsor / PMO expects

An EAC with the TCPI it implies, and a clear ask when EAC exceeds BAC — reserve draw, change request, or descope. A forecast that just reports a bigger number without a decision attached isn't finished.

Forecast to completion