The Cost Performance Index (CPI) is a key metric used in project management to measure the financial efficiency and cost-effectiveness of a project. It is calculated by dividing the Earned Value (EV) by the Actual Cost (AC), providing insight into how well the project is performing relative to its budget. A CPI greater than 1 indicates that the project is under budget, while a CPI less than 1 signals that the project is over budget, making it essential for assessing both current performance and future forecasting.
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