At the Beginning of the Project, It May Not Be

question 62

Multiple Choice

At the beginning of the project, it may not be possible to estimate the costs for all activities with a level of confidence regarding their accuracy.This is especially true for

• A) projects with a short term.
• B) longer-term projects.
• C) projects that are similar to ones completed by the organization before.
• D) projects with activities that are serially related.

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Definitions:

Economic Profits

Profits exceeding the opportunity costs of all resources used in production, including the cost of capital.

Marginal Analysis

The examination of the benefits and costs of choosing one more or one less unit of a good or service.

Implicit Costs

The opportunity costs of using resources owned by the firm for its own production instead of selling or renting them to others.

Interest Rate

The price, calculated as a percentage of the amount borrowed, that a lender charges a borrower for the use of their savings for one year.