Question: In many projects, there is often a noticeable difference between the estimated project cost and the cost budget, with the cost budget being set at

In many projects, there is often a noticeable difference between the estimated project cost and the cost budget, with the cost budget being set at 20% more than the initial project cost estimate of R137,500.

1. Explain why this difference exists and how the cost budget is determined.

2. Provide a detailed explanation of the factors involved in arriving at the cost budget and justify the importance of having this budget in project management.

Step by Step Solution

★★★★★

3.32 Rating (149 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

1 The variance between the estimated project cost and the cost budget arises due to the inherent unc... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...

List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

I'm working on Question #5 (parts a and b) and do not have a good understanding of Put Warrant or Convertible Bonds. I'm able to find some information on line as to what they are, however, it is...

Coca Cola is flowing into the Cloud! Brian Shipman Kenya Spratt Andrew Stocksdale Dexter White BMGT 487 7380 Project Management Professor Mitchell Richard 02/28/2017 Introduction Project Management...

There is a practical project in which there is a company suppose named ABC company and which has created a website named suppose XYZ.com which collabs with a university namely suppose ABCD university...

An Activity Analysis of Project Scheduling Problem: A Case Study Vikash Agarwal Department of Mechanical Engineering Reasearch Scholar, India Dr.Rajeev Kumar Upadhyay Department of Mechanical...

PROJECT RISK MANAGEMENT PLAN TEMPLATE This Project Risk Management Template is free for you to copy and use on your project and within your organization. We hope that you find this template useful...

Your firm is looking to expand into a new market segment that will require an initialcapital expenditure on new equipment of $4 million. The new division is expected tobegin generating revenues next...

Please answer those question in detail with word and excel, and thank you! Financial Management (BUSI 640) Problem Set #2 1. Your firm is looking to expand into a new market segment that will require...

a) The magnetic field points out of the page and increasing.Explain. b) The magnetic field points out of the page and is constant.Explain. c) The magnetic field points out of the page and...

How to draw [cr(H2o)3cl3]+ fac and mers and rotate both cis and trans to check if it is optically active Also explain how to draw [Co(en)2cl2]+ cis and trans after rotating 180 degrees ***I have the...

Models: Additive: Use when patterns stay about the same. Multiplicative: Use when patterns grow with sales which fits this case since sales are spiking.

I need help with this economics equation - 10 2

The emission spectrum below for a one-electron (hydrogen-like) species in the gas phase shows all the lines, before they merge together, resulting from transitions to the first excited state from...

how to solve this question to get these result the values of the magletic dipole expected from the shell model, uld compare the experimental values: Nuclide 87SE 147Eu 11 T +0.510 -1.093 1.304 +5.34...

Solve the following systems of equations using MATLAB You will need to work out A and b for each system a. 3x + y = 11 x + 4y = 11 Ax = b x = Ab Once you have identified A and b you can solve in...

please solve all parts using Matlab 1) 2) 3) 4) 5) Write a function my trace to compute the trace of a matrix Write a function my sum to sum all the elements of a matrix Write a function sum rows to...

7b. Based on senior managements strategy ...Based on senior managements strategy for Amtrak, which of the following would be considered an operational plan?Multiple Choicebreaking up long-distance...

What is treaty shopping?

A foreign subsidiary of Wampoa Ltd. has one asset (inventory) and no liabilities. The subsidiary operates with a significant degree of autonomy from Wampoa and primarily uses the local currency (the...

This exercise consists of two parts. Part A. The following table summarizes the assets of the Rocker Division (a separate cash-generating unit) at December 31, Year 5, prior to testing goodwill for...

A company is examining two mutually exclusive projects. Project X requires an immediate investment of $100,000 and produces no profit until Year 3. Then the annual profit is $60,000 for Years 3 to 5...

The provincial governments Ministry of Fisheries requires a new patrol boat. The price of a Songster is $90,000, and its annual operating costs will be $10,000. It will be sold for about $20,000...

Investment proposals A and B require initial investments of $45,000 and $35,000, respectively. Both have an economic life of four years with no residual value. Their expected profits are as follows:...