Free PMP Terms and Definitions
Understanding common project management terms can be a challenge for all project managers. To help you understand those terms and definitions Crosswind Project Management has created a free to use glossary to help in your pmp training. In this page you will find the terms and definitions associated within the component areas of framework to get a better understanding of how this process works and relates to project management.
Sign Up for a daily free Tip of The Day!
| Term | Definition |
|---|---|
| Actual Cost (AC) | The total cost accrued for an activity over a designated time period; also known as the actual cost of work performed (ACWP) |
| Budget | The total cost of all project iterations including adjustments for change |
| Budget at Completion (BAC) | The total project budget derived from incorporating all items from the project's individual budgets; also called the sum of all planned value (PV) |
| Chart of Accounts | A structure used to monitor project cost that usually aligns with a company's accounting system and WBS of the project or program |
| Code of Accounts | The numbering system used to distinguish constituents of the WBS |
| Control Account | A specific point in the work breakdown structure (WBS) where the project scope, budget, actual cost, and schedule are combined and then compared to earned value in order to establish performance metrics |
| Cost Aggregation | Adding together the work package cost estimates for high-level WBS components, including control accounts, for the purpose of establishing the value of the total project or the control account work |
| Cost Baseline | The authorized project budget version, exclusive of management reserves, that requires a formal control process to effect changes and is used as the basis of comparison to actual costs |
| Cost Management Plan | The document, part of the project or program management plan, used to describe the framing, forming, observation, and control of project costs |
| Definitive Estimate | A cost estimate that provides an accurate estimate of the project cost; the final cost estimate used before implementation; typically the range of -10% to +10% |
| Earned Value (EV) | Represents the worth of the work completed at a specific point in time; also known as the budgeted cost of work performed (BCWP) |
| Earned Value Analysis | An approach that measures scope, schedule, and cost to establish the state of the project schedule and budget. |
| Earned Value Management | A technique, effected by considering actual cost (AC), time (PV) , and what has been accomplished (EV), that is used to determine project progress and performance |
| Funding Limit Reconciliation | The process of comparing planned project expenses to any limitations or constraints in project funding |
| Internal Rate of Return (IRR) | In capital budgeting, the interest rate that makes the net present value of all cash flow equal to zero |
| Net Present Value (NPV) | Comparison of the value of a dollar today versus the value of that dollar in the future taking inflation and return into account |
| Opportunity Cost | The amount associated with bypassing one opportunity in favor of another; as an example, if the pursuit of project B with a value of $75K is elected over the pursuit of project A with a value of $50K, $50k value of project A will not be realized |
| Payback Period | The amount of time needed to recover the investment in the project |
| Planned Value (PV) | The total value of the work scheduled as of a certain point in time; also known as the budgeted cost of work scheduled (BCWS) |
| Present Value (PV) | The current value of a value stream at a specific point in time in the future |
| Return on Investment (ROI) | The amount of income from an investment; income divided by the investment |
Crosswind’s 35 Contact Hour PMP Exam Prep Course Bundle offers the best PMP certification training. This 4 day course is taught by author Tony Johnson will help you pass the PMP Exam the first time via the Crosswind Way!