Management Reserve question







7. 


Add a note hereFunding requirements for a project are usually in incremental amounts that are not continuous, and these appear as a step function in the graph depicting Cash flow, Cost baseline and Funding. Any gap at the end of the project, between funds allocated and the cost baseline and cash flow amounts represents:




  1. Add a note hereThe amount of Management Reserve that was not used



  2. Add a note hereThe amount of Management Reserve that was not allocated



  3. Add a note hereThe cost overrun



  4. Add a note hereIneffective utilization of funds









7. 


Add a note hereFunding requirements for a project are usually in incremental amounts that are not continuous, and these appear as a step function in the graph depicting Cash flow, Cost baseline and Funding. Any gap at the end of the project, between funds allocated and the cost baseline and cash flow amounts represents:




  1. Add a note hereThe amount of Management Reserve that was not used



  2. Add a note hereThe amount of Management Reserve that was not allocated



  3. Add a note hereThe cost overrun



  4. Add a note hereIneffective utilization of funds







7. 


Funding requirements for a project are usually in incremental amounts that are not continuous, and these appear as a step function in the graph depicting Cash flow, Cost baseline and Funding. Any gap at the end of the project, between funds allocated and the cost baseline and cash flow amounts represents:


A.    The amount of Management Reserve that was not used


B.    The amount of Management Reserve that was not allocated


C.    The cost overrun


D.    Ineffective utilization of funds



 Answer is A, can anyone pls explain why? Thanks.

It is fund for unknown , unknown risks.


it does not utilize till such risk events triggered.


but funding in anticipation of overcoming such negative risk , is always put forth .


and at last if such risks not happened - this reserve will be balanced.