**Cost performance index (CPI), **

### Definition of Cost performance index (CPI):

A measure of the efficiency of expenses spent on a project. The formula that a business normally uses to assess the cost performance index (CPI) is the ratio of earned value (EV) over actual costs (AC); therefore, CPI is equal to EV divided by AC. A value higher than one indicates a favorable condition, while a value under one would be considered unfavorable.

Meaning of Cost performance index (CPI) & Cost performance index (CPI) Definition