Which equation represents the Cost Performance Index (CPI)?

The Cost Performance Index (CPI) is a critical metric used in project management to measure the cost efficiency and financial performance of a project. The CPI is calculated as the ratio of earned value (EV) to actual cost (AC). This equation helps project managers understand how well the project is adhering to its budget and how effectively funds are being utilized.

When the CPI is greater than 1, it indicates that the project is performing well in terms of cost efficiency, meaning that the value of the work completed is greater than what has been spent. Conversely, a CPI less than 1 suggests that the project is overspending relative to the budgeted value of work completed.

The other equations listed in the choices do not provide a measure of cost performance in the same way that the ratio of EV to AC does, nor do they capture the essence of cost efficiency as established by the CPI. Therefore, the equation EV / AC is indeed the correct representation of the Cost Performance Index.