Schedule Variance and Cost Variance are two essential parameters in earned value management; helps you to analyze the project’s progress, i.e., how are you performing regarding schedule and cost. Schedule Variance helps to determine if you are behind or ahead of schedule, and Cost Variance helps determine if you are under budget or over budget. If both variances are positive, this means that the project is progressing well. However, something is wrong if either variance is negative and the project team has to take corrective action to bring the project back on track. Now the advantage of one choice ( provided in the question) over the other largely depends on how much negative either SV or CV are.I think option 2 ( SV is negative and the CV is positive) is preferable because a negative CV implies going over budget as planned for the project. Adjusting budget as project has already started is quite challenging to accomplish. However, this negativity can be overcome in the initial phase by working extra hours on the project till it matches the deadline as set. However, if the project was already at this terminal phase, having a negative would be a tremendous setback for the project. Overall, choice 1 or 2 depends on various aspects such as the nature of the project and the phase at which the the project is currently in.