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The Cost Performance Index (CPI) measures cost efficiency: how many dollars of value (EV) you are earning for each dollar actually spent (AC). CPI = EV ÷ AC. A CPI of 1.00 indicates on-cost performance; greater than 1.00 indicates an underrun (earning more value per dollar than planned), and less than 1.00 indicates an overrun. Option A (SPI) measures schedule efficiency relative to the plan. Options C and D are absolute variances (cost and schedule) rather than indices. CAPM EVM guidance emphasizes interpreting indices with context: persistent CPI < 1.0 often signals systemic issues such as underestimated complexity, productivity shortfalls, or higher-than-expected rates. Use CPI to inform EAC forecasts (e.g., EAC = BAC/CPI when trends persist) and to guide corrective actions—process improvements, scope trade-offs, or resource adjustments. Pair CPI with SPI to understand if schedule slippage is also driving cost via prolonged overhead, then communicate implications through performance reports and change control as needed.