Which Statement Is Correct About the Impact of Estimation Errors

question 26

Multiple Choice

Which statement is correct about the impact of estimation errors on construction contracts?

• A)Underestimating future costs decreases the percentage complete ratio.
• B)Overestimating future costs increases the percentage complete ratio.
• C)Underestimating future costs increases the profit recognized in future periods.
• D)Underestimating future costs increases the profit recognized in the current period.

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Definitions:

Declarative Statements

Sentences that make a statement or express an opinion or fact, typically in a straightforward and unequivocal manner.

Directives

commands or instructions given with authority, often used in legal, professional, or organizational contexts.

Positive Feedback

A response or information that reinforces a behavior, encouraging its repetition or amplification.

Coping Ability

The capacity or skills individuals have to manage and endure stress and adversity in their lives.