In Making an Estimate of the Most Pessimistic Time for an Activity

question 136

Multiple Choice

In making an estimate of the most pessimistic time for an activity, a manager deliberately estimates this time too high (i.e., longer than it should be) . What is the result of this action, assuming the beta distribution is being used to make time estimates?

• A) The most likely time for this activity will be larger than it should be.
• B) The variance of the activity will be smaller than it should be.
• C) The beta distribution will be symmetric around its mean.
• D) The expected time for this activity will be larger than it should be.

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Definitions:

Total Debt Ratio

This ratio measures the proportion of a company's total debt to its total assets, indicating the extent of leverage and financial risk.

Total Assets

The sum of all current and non-current assets that a company owns, used in evaluating the company's financial strength.

Cash Flow

The total amount of money being transferred into and out of a business, affecting the company's liquidity.

Investment Activities

Financial actions related to the acquisition and disposal of long-term assets and other investments not considered cash equivalents.