A Disadvantage of Contingency Funds Is

question 91

Multiple Choice

A disadvantage of contingency funds is:

• A)A recognition that the future contains both knowns and unknowns and the problems that might arise will impact the budget.
• B)It is difficult to ascertain across what project activities contingency funds should be applied.
• C)That application to the contingency fund gives an early warning signal of a potential overdrawn budget.
• D)That provision is made in the company plans for an increase in project cost.

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Definitions:

Utility Function

A representation in economics of how a consumer ranks different goods or services, based on the level of satisfaction they provide.

Consumption

Consumption involves the use of goods and services by households, constituting one of the primary components of economic activity and a key indicator of economic health.

Income

The monetary payment received for work or through investments, pensions, or subsidies, which is used for consumption and saving.

Utility Functions

Mathematical models used to represent an individual's preference ordering over a set of alternatives, based on the level of satisfaction or utility.