A construction company is planning to bid for a government project to build a new airport runway. The estimated project cost is $100 million, and the construction period is expected to last for two years. The company's management team has identified four potential risks associated with the project, which are:

1. Labor shortages that may cause delays and increase costs.
2. Adverse weather conditions that may cause delays and affect the quality of work.
3. Increase in the price of raw materials due to supply chain disruptions.
4. Changes in government regulations that may affect the project's timeline and budget.

The management team has assigned probabilities and impacts to each risk as follows:

Risk	Probability	Impact
Labor shortages	0.30	$20 million
Adverse weather conditions	0.20	$10 million
Supply chain disruptions	0.15	$15 million
Government regulation changes	0.10	$5 million

Assuming that the risks are independent of each other, calculate the expected value of the total risk cost, the standard deviation of the total risk cost, and the probability of a cost overrun exceeding $20 million.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below To calculate the expected value of the total risk cost we need to multiply the probabilit... View the full answer