Identify the following terms: PV, EV, and AC. Why are these terms important? How do they relate to each other?

PV refers to Planned Value.  This is the expected (planned) budget for all project activities that are planned to occur within a specific time period.  Planned Value is compared with Earned Value to determine the “real” progress that has been made on a project.

EV refers to Earned Value.  Earned value is the budgeted cost of the work performed.  This is important in establishing the true progress of the project and in understanding the meaning of variances from the project baseline.

AC stands for Actual Cost.  These are the total costs incurred to complete project work.