According to the PMBOK Guide (6th Edition), the Estimate at Completion (EAC) is the specific forecasting metric used to determine the total expected cost of finishing all the project work. It is a vital component of Earned Value Management (EVM) that projects the final cost based on current performance and the work remaining.
The EAC is typically determined by adding the actual costs incurred to date (AC) to the Estimate to Complete (ETC), which represents the expected cost to finish the remaining work.
Why EAC is the correct tool for this determination:
* Forecasting: Unlike the original budget, the EAC is dynamic. It accounts for variances that have occurred during execution, providing a realistic view of how much money will ultimately be needed.
* Accuracy: It allows the project manager to communicate to stakeholders whether the project will require more or less funding than originally authorized.
Analysis of Distractors:
* A (Earned value management - EVM): This is the overarching methodology that combines scope, schedule, and resource measurements. While EAC is a part of EVM, " EVM " itself is the system, not the specific value that tells you the total money needed.
* C (Earned value analysis - EVA): This is the activity of comparing the planned amount of work with what has actually been completed. It is the process of calculating variances, but the " answer " to how much money is needed is the EAC.
* D (Budget at completion - BAC): This is the original total budget established during the planning phase. While it was the initial estimate of how much money was needed, it does not reflect the current reality of the project if there have been any performance deviations or changes.