What is the equation to calculate cost variance (CV)?

This equation suggests dividing Earned Value (EV) by Budget at Completion (BAC), which is incorrect. CV is concerned with the difference between what has been earned and what has been spent, rather than a ratio of these values, making this formula irrelevant for cost variance calculations.

This option indicates subtracting Budget at Completion (BAC) from Earned Value (EV), which does not reflect actual costs incurred. CV specifically compares earned value to actual costs (AC), not the budgeted amount, and thus this formula does not provide a valid assessment of cost performance.

This choice presents a ratio of Earned Value (EV) to Actual Cost (AC), which does not yield a variance but rather a cost performance index. While useful for understanding efficiency, this calculation does not determine the difference between what was earned and what was spent, which is essential for calculating CV.