Assuming That a Cost Is Mixed and Linear, and That

question 15

Multiple Choice

Assuming that a cost is mixed and linear, and that past cost behaviour is expected to continue into the future, which of the following is mostly likely the best technique for estimating future costs?

• A) Engineered estimate of cost
• B) Two-point method
• C) Scatter plot
• D) Regression analysis

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Definitions:

Probability

The measure of the likelihood that an event will occur.

Expected Utility

A concept in economics and finance that calculates the anticipated utility of different choices, taking into account the various possible outcomes and their probabilities.

Expected Utility Function

A mathematical representation of a decision-maker's preference over uncertain outcomes, emphasizing the expected level of satisfaction or value.

Probability

A numerical assessment between 0 and 1 indicating how probable it is for an event to take place.