Using earned value management (EVM) on a cross-country pipeline project, the project manager calculated EV/AC = 0.9024. What does this value indicate for the project?

The Earned Value (EV) divided by the Actual Cost (AC) gives the Cost Performance Index (CPI). A CPI of 0.9024 means that for every dollar spent, the project is only earning approximately 90 cents of value. Since the CPI is less than 1, it indicates that the project is over budget, meaning it has started exceeding the planned cost. "The project is earning less value than was planned" is incorrect because CPI compares earned value to actual cost, not planned value. "The project has earned more value than planned" is incorrect; a CPI less than 1 indicates the opposite. "The project is close to exceeding the planned cost" is less precise; a CPI less than 1 directly shows that the project is already exceeding the planned cost.