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(a) Distinguish between the two terms Fixed Risk and Variable Risk. (b) Discuss the meaning of Average Risk Estimate (7 marks) (6 marks) (c)
(a) Distinguish between the two terms "Fixed Risk" and "Variable Risk." (b) Discuss the meaning of Average Risk Estimate (7 marks) (6 marks) (c) Calculate the Average Risk Estimate using the following data: (12 marks) Base Estimate: $100,000,000 Variable risks Max risk allowance Average risk allowance Design Development $6,000,000 $4,000,000 Market Conditions $4,000,000 Contract Variations $6,000,000 $2,000,000 $4,000,000 Fixed risks Max risk allowance Probability of occurrence Access road $500,000 0.40 Contract period $1,200,000 0.50
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Fundamentals of Management
Authors: Robbins, DeCenzo, Coulter
7th Edition
132996855, 0-13-610982-9 , 9780132996853, 978-0-13-61098, 978-0136109822
