b?

Submitted by dipti1pmp on Wed, 11/26/2014 - 13:15

You are working for FALCON highway construction agency as a project cost estimator. The agency started a highway construction project which is in it's planning phase. The rough order of magnitude (ROM) cost estimate for the project is expected to be between 3 and 5 million dollars in the planning phase with a ROM of -25% to +25%. What will be the ROM estimate in the execution phase if it changes to -10% to +10%?

A.   Between 3.1 and 4.1 million dollars

B.   Between 3.6 and 4.4 million dollars

C.   Between 3.9 and 4.1 million dollars

D.   Between 3.4 and 4.4 million dollars

can any one explain how ans B is the right choice?with deatiled explnation and calculation

 

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ovhirup

Wed, 11/26/2014 - 13:59

ROM is -25% to +75%, if it is considered to be ROM of -25% to +25% then the Est is 3-5 million


Now in estimating phase the range changes to  -10% to +10%


that means margin for error is smaller.


 


x(1+0.25)=5==>x=4


so -10% to +10% would be 3.6-4.4 ml $


 


Ans B.


 


 


 

dipti1pmp

Thu, 11/27/2014 - 05:46

Thankyou for the kind explanation..I got it now.

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