While preparing an earned value analysis, the project manager reports: Approved work package cost estimates = US$9,500; Contingency reserves = US$500; Management reserves = 10% of contingency reserves; Percent complete = 50%; Planned percent = 40%; Actual cost (AC) = US$4,500. The current budget at completion (BAC) is considered achievable. What cost performance factor is required for the remaining work to meet the baseline?

The question asks for the Cost Performance Index to Complete (CPIc), which indicates the required cost efficiency for the remaining work to meet the budget. First, calculate the Budget at Completion (BAC). BAC = Approved work package cost estimates + Contingency reserves = $9,500 + $500 = $10,000. (Management reserves are not part of the project's performance measurement baseline, so they are excluded from BAC). Next, calculate the Earned Value (EV). EV = BAC Percent complete = $10,000 50% = $5,000. Then, calculate the Estimate to Complete (ETC) based on the current CPI. ETC = (BAC - EV) / CPI. However, we need the CPIc, which is (BAC - EV) / (BAC - AC). CPIc = (BAC - EV) / (BAC - AC) = ($10,000 - $5,000) / ($10,000 - $4,500) = $5,000 / $5,500 = 0.9090... which rounds to 0.91. The other options are incorrect because they result from miscalculations of BAC, EV, or AC, or using the wrong formula. For example, 0.88 might result from including management reserves in BAC or using an incorrect denominator.