# Formulas

**Project Management Quick Formula Reference**

**Network Diagram
**Activity Duration = EF – ES + 1 or Activity Duration = LF – LS + 1

Total Float = LS – ES or Total Float = LF – EF

Free Float = ES of Following – ES of Present – DUR of Present

EF = ES + duration – 1

ES = EF of predecessor + 1

LF = LS of successor – 1

LS = LF – duration + 1

**Earned Value**

CV = EV – AC

CPI = EV / AC

SV = EV – PV

SPI = EV / PV

EAC ‘no variances’ = BAC / CPI

EAC ‘fundamentally flawed’ = AC + ETC

EAC ‘atypical’ = AC + BAC – EV

EAC ‘typical’ = AC + ((BAC – EV) / CPI)

ETC = EAC – AC

ETC ‘atypical’ = BAC – EV

ETC ‘typical’ = (BAC – EV) / CPI

ETC ‘flawed’ = new estimate

Percent Complete = EV / BAC * 100

VAC = BAC – EAC

EV = % complete * BAC

**PERT**

PERT 3-point = (Pessimistic+(4*Most Likely)+Optimistic)/6

PERT σ = (Pessimistic – Optimistic) / 6

PERT Activity Variance = ((Pessimistic – Optimistic) / 6)^2

PERT Variance all activities = √sum((Pessimistic – Optimistic) / 6)^2

**Project Selection**

PV = FV / (1+r)^n

FV = PV * (1+r)^n

NPV = Formula not required. Select biggest number.

ROI = Formula not required. Select biggest number.

IRR = Formula not required. Select biggest number.

Payback Period = Add up the projected cash inflow minus expenses

until you reach the initial investment.

BCR = Benefit / Cost

CBR = Cost / Benefit

Opportunity Cost = The value of the project not chosen.

**Depreciation**

Straight-line Depreciation:

Depr. Expense = Asset Cost / Useful Life

Depr. Rate = 100% / Useful Life

Double Declining Balance Method:

Depr. Rate = 2 * (100% / Useful Life)

Depr. Expense = Depreciation Rate * Book Value at Beginning of Year

Book Value = Book Value at beginning of year – Depreciation Expense

Sum-of-Years’ Digits Method:

Sum of digits = Useful Life + (Useful Life – 1) + (Useful Life – 2) + etc.

Depr. rate = fraction of years left and sum of the digits (i.e. 4/15th)

**Communications**

Communication Channels = n * (n-1) / 2

Probability

EMV = Probability * Impact in currency

Procurement

PTA = ((Ceiling Price – Target Price) / Buyer’s Share Ratio) + Target Cost

**Mathematical Basics**

Average (Mean) = Sum of all members divided by the number of items.

Median = Arrange values from lowest value to highest. Pick the middle one. If there is an even number of values, calculate the mean of thetwo middle values.

Mode = Find the value in a data set that occurs most often.

**Values**

1 sigma = 68.26%

2 sigma = 95.46%

3 sigma = 99.73%

6 sigma = 99.99%

Control Limits = 3 sigma from mean

Control Specifications = Defined by customer; looser than the control limits

Order of Magnitude estimate = -25% to +75%

Preliminary estimate = -15% to + 50%

Budget estimate = -10% to +25%

Definitive estimate = -5% to +10%

Final estimate = 0%

Float on the critical path = 0 days

Pareto Diagram = 80/20

Time a PM spends communicating = 90%

Crashing a project = Crash least expensive tasks on critical path.

JIT inventory = 0% (or very close to 0%.)

Minus 100 = (100) or -100

**Acronyms**

AC – Actual Cost

BAC – Budget at Completion

BCR – Benefit Cost Ratio

CBR – Cost Benefit Ratio

CPI – Cost Performance Index

CV – Cost Variance

DUR – Duration

EAC – Estimate at Completion

EF – Early Finish

EMV – Expected Monetary Value

ES – Early Start

ETC – Estimate to Complete

EV – Earned Value

FV – Future Value

IRR – Internal Rate of Return

LF – Late Finish

LS – Late Start

NPV – Net Present Value

PERT – Program Evaluation and Review Technique

PTA – Point of Total Assumption

PV – Planned Value

PV – Present Value

ROI – Return on Investment

SPI – Schedule Performance Index

SV – Schedule Variance

VAC – Variance at Completion

σ Sigma / Standard Deviation

^ “To the power of” (2^3 = 2*2*2 = 8)