What is indicated by a negative Cost Variance (CV)?

A negative Cost Variance (CV) indicates that the costs incurred for the project are higher than the planned budget for the work that has been performed up to that point. In project management, CV is calculated as the difference between Earned Value (EV) and Actual Cost (AC). When CV is negative, it means that the Actual Cost exceeds the Earned Value, which equates to the project being over budget. This situation signals that more money has been spent on the project than what was initially planned for the amount of work that has actually been completed, ultimately revealing the need for budgetary adjustments or corrective actions.

The other options do not align with this interpretation of a negative CV. The project under budget would indicate a positive CV, being ahead of schedule is unrelated to cost variances, and having all milestones met does not specifically denote the project's budget status. Hence, recognizing a negative CV is crucial for project managers to identify potential financial issues early on.