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:

Urban Renewal

A series of policies supported by all levels of government that allowed local governments and housing authorities to demolish so-called blighted areas in urban centers to replace them with more valuable real estate usually reserved for white people.

Kitchen Debate

A series of impromptu exchanges between U.S. Vice President Richard Nixon and Soviet Premier Nikita Khrushchev in 1959, highlighting the contrasts between American and Soviet lifestyles and ideologies.

Nikita Khrushchev

A Soviet statesman who led the Soviet Union during part of the Cold War as the First Secretary of the Communist Party and as Premier.

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Products and services that satisfy the needs and wants of consumers through their direct consumption or use.