The PMP® Exam »PM Formulas: S e Formulas for Success This is the free and redacted Preview version. This free version of The PMP Formula Study Guide™ has been redacted for content. Redacted means that some formulas, acronyms and definitions are visible in clear text, but most of them have been obscured (“grayed out”). This allows you to “try before you buy”. You can: - preview the full version (redacted), - study some of the formulas for free, and - decide if you want to buy the full version The full version is available at www.pm-formulas.com "Note:The formulas that are in “lear text" have been righlighted in yellow, so that you can easly see them. The hl guise does net use any highightng You may also notice that tis redacted version is slighty “bly. The fl version is ensp and clear witout any blurnnes. Copyri 12 EditionPM %& Formulas: Formulas for Success About this Guide The Project Management Professional (PMP)° Certification designation will set you apart from other project managers and we thank you for purchasing our PMIP® Exam Formula Study Guide™ to help you achieve this milestone. We are certain that it wll be the most beneficial tool you use while studying the formulas you need to know. We wish you all the best for your PMP Exam! This guide contains the following four sections: The Formula Table Explained On the following pages you will find the essential formulas that you will need to know and apply in order to pass the PMP Exam. The formulas are listed in a table with three columns. For each entry we explain the concept, lst the formula(s), and explain how to interpret the result of the calculation. For example: Essential PMP Exam Formulas - The formulas you need to know for the PMP Exam Formula Elaboration « These formulas require little mare explanation Values to Remember - A selection of important values to study in preparation for the PMP Exam, Acronyms - The list of acronyms used throughout this guide as well as on the PMP Exam. [concept Formula Result interpretation The first column contains the “concept” behind the formula. Instead of just giving you the formula “CV =! EV - AC" we want to make sure that you understand: lwhat the formula is trying to achieve. The best way We list the actual formula in the second column. For some concepts multiple formulas are needed so we list them all \When helpful we also add examples for [The formula won't do you much good if you cannot explain what the result is or means. That is why we include an interpretation in the third column. PMP to do that s by explaining its concept. \Example, Cost Variance (CV) Provides cost performance ofthe project. Helps determine ifthe projects proceeding as planned. better understanding, Jquestions may require interpretation, Exponentiation ‘A number of formulas needed on the PMP Exam require exponentiation. The exponent is usually shown as a superscript to the right of the base. For instance: 3. This exponentiation can be read as 3 raised to the 4” power or as 3 raised fo the power of 4. And 3* would be calculated as 3*3°3°3=81. ‘The superscript notation 3° is convenient in handwriting but can lead to errors when you are in a hurry like on the PMP Exam. For instance itis very easy to forget to “raise” the exponent in a formuta when you are hurtiedly writing it down in the minutes before you start the exam. So it could easily happen that the formula PV = FV / (14r)"gets written down as PV = FV/(1#0)n. The difference may Seem trivial but the result is disastrous. Therefore, we chose to use an accepted, alternative way of expressing the exponentiation by using the * character. When using this character, 3*is now expressed as 3°4 and FV = FV / (14r)"is expressed as PV = FV/ (1#r)*n, This removes any margin for visual errors, Copyright and Disclaimer PMI, PMP, CAPM, PMP, PMI-ACP, PMI-SP, PMI-RMP and PMECK are trademarks of the Projact Management Institute, In. PA has not endorsed and did not participate inthe development o his pubication. PMI does not sponsor this publication and makes no "warranty, guarantee or representation, expressed or implied as to tre accuracy or content Every attempt has been made by OSP Intemational LLC to ensure thatthe information presented in this publication fs accurate and can serve as preparation forthe PMP Cettication exam. However, OS? International LLC accepts no legl responsiblity forthe content herein. This document should be Used only asa reference and not as a replacement for ofcilly pubtshed material. Using the information from this document does not guarantee that the reader wll pass the PMP certification exam. No such guarantees or warranties are implied or expressed by OSP Intemational LLC Page Use with PMBOK® Guide 5th Visit www pm-prepcast.com for Exam Resources Copyright © 2009-2014 by OSP International LLC. All rights 13 reserved. Version 5.03 - EditionPM e Formulas Formulas for Success Essential PMP Exam Formulas Ea [Fomia ea RR Soencences i, icecream ttt a." [Estimate at Completion (EAC) [Estimate to Complete (ETC)PM%& Formulas’ Formulas for Success l 5 2 3 a etion | Earned Value (EV) LTT Varna Visit www pm-prepcast.com for Exam Resources Page| Copyright © 2009-2014 by OSP Intemational LLC. All rights reserved. Version 5.03 - Use with PMBOK® Guide Sth EditionPM % Formulas Formulas for Success [Concept [Formula [Result Interpretation PERT Standard Deviation (Single Activity) PERT Activity Variance PERT Standard Deviation (All Activit Activity Duration Free Float Total Float * See Formula Elaboration secuonPM % Formulas’ Formulas for Success [Communication Channels. uv o ® a Visit www pm-prepcast.com for Exam Resources Copyright © 2009-2014 by OSP Intemational LLC. All rights reserved. Version 5.03 - Use with PMBOK® Guide Sth EditionPM Formulas Formulas for Success (Concept [Formula [Result Interpretation [Expected Monetary Value (FMV) Point of Total Assumption (PTA) [Straight-line Depreciation [Double Declining Balance [Sum-of-Years' Digits Method Average Eee ee Mr cat equen vonage tePM % Formulas’ Formulas for Success Formula Elaboration There are two approaches for calculating ES, EF, LS and LF: Ml m- prey 1 for Exam Resources e219 Copii 2008.01 by OSP Inlemational LLC Al ghs reserved. Version 5.03 - Use with PMBOK® Guide sh EatonPM%& Formulas’ Formulas for Success Values to Remember [Control Limits [Control Specifications Rough Order of Magnitude estimate Preliminary estimate Budget estimate Definitive estimate Final estimate Float on the eritical path Pareto's Law [Time @ PM spends communicating (Crashing a project l iq i | Value ot the inventory im a Justin time (aT) environment [Sunk Cost Negative Numbers The Estimate Ranges Disagreement | Page |10 Copyright © 2009-2014 by OSP Intemational LLC. All rights reserved. Version 5.03 - Use with PMBOK® Guide Sth EditionPM ‘Formulas Formula Acronyms Formulas for Success ‘Acronym| [Term AC EV FV IRR aT 3] yg" PVPM%& Formulas’ Formulas for Success [ToL vac Visit www pm-prepcast.com for Exam Resources Page |12 Copyright © 2009-2014 by OSP Intemational LLC. All rights reserved. Version 5.03 - Use with PMBOK® Guide Sth Edition