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2 years ago

What should you do if the severity of risk is low and the frequency of the risk event occurring is high?

1 answer:

4 0

If the severity of risk is low and the frequency of the risk event occurring is high thanwe should Avoid the risk.

High Frequency/ High Severity- Risks are almost certain to occur and when they occur impact will be very high. In such a case it is best to use Avoidance as a risk management technique. If avoidance is not possible then prevention and insurance techniques can be considered. High frequency/ Low severity- This more serious risk and occurrence is high but the impact is low. Examples of such risks include workers’ injuries and shoplifting. A common way to manage this type of risk is through Prevention.

Low frequency/ High severity- The impact of these kinds of risks is very high and can bankrupt a business. Insurance is the best technique to manage these risks that have low loss frequency and high loss severity. Low frequency/ Low severity- Retaining and self-insuring the risk. Risk occurrence is low and impact is also very low. In most cases, the costs of managing them outweigh the cost of retaining them.

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You might be interested in

Gdp is $8 trillion. if consumption is $5 trillion, investment is $1 trillion, and government purchases are $2 trillion, then:___

Sedaia [141]

Exports are equal to imports when Gdp is $8 trillion. if consumption is $5 trillion, investment is $1 trillion, and government purchases are $2 trillion

Given -

Gross Domestic Product = $8 trillion

Consumption Spending = $5 trillion

Investment Spending = $1 trillion

Government Purchases = $2 trillion

The GDP is calculated as follows -

Gross Domestic Product = Consumption + Investment + Government Purchases + Net Exports

Since other components are given, net exports can be calculated.

Net Exports = Gross Domestic Product - Consumption - Investment - Government Purchases

Net Exports = 8 - 5 - 1 - 2

Net Exports = 0

Therefore, Exports are equal to Imports

Learn more about GDP or Gross Domestic Product here

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4 0

2 years ago

Your firm is considering a project that will cost $ 4.548 million up front, generate cash flows of $ 3.50 million per year for

Alika [10]

Answer:

(a) It will have multiple IRRs

(b) The MIRR calculated is 10.18% . Going by MIRR result , this project will only generate returns that is equal to cost of capital(10%) .If there are other avaible more viable projects, it should be rejected ( Please see attached computation).

Explanation:

(a) The multiple IRRs occurs when cash flows change sign and result in more than one value for the IRR.

Application of IRR to value an investment is only suitable when the project has normal cash flows, i.e a negative initial cash flow (i.e initial investment) followed by a series of positive cash flows.

In this scenario, we have negative cash flow of $6m in year 4 which occured after positive cash flow of $3.5m per year from year 1 to 3. This typically make IRR unreliable. To overcome this limitation , we can use Modified Internal Rate of Return (MIRR)

(b) Please see attached for more details.

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4 0

3 years ago

According to PMI’s "Code of Ethics and Professional Conduct", project managers should exhibit all of the following behaviors EXC

Harrizon [31]

Answer:

The correct answer is letter "C": authority - exert economic and political power .

Explanation:

The Project Management Institute (PMI) establishes in its "Code of Ethics and Professional Conduct" that there are four milestones important to consider for every project manager: honesty, responsibility, respect, and fairness. According to the PMI, those values drive not only the ethical life in the managerial but the real world, where the best outcome is the most ethical.

In that sense, "authority" has nothing to do with the PMI's Code of Ethics.

5 0

3 years ago

Beginning work in process inventory: Units in beginning work in process inventory500 Materials costs$ 7,800 Conversion costs$ 9,

Gre4nikov [31]

Answer:

$15.76

Explanation:

beginning WIP 500 units

materials 85% complete, so 15% added during the period (EUP during current month = 75 units)

conversion costs 55% complete, so 45% added during the period (EUP during current month = 225 units)

units started 7,000

units transferred out 6,100

units started and transferred out = 6,100 - 500 = 5,600 (EUP = 5,600 units)

ending WIP 1,400 units

materials 60% complete (EUP = 840 units)

conversion costs 50% complete (EUP = 700 units)

materials cost for the month = $102,700

total EUP for the month = 6,515 units

total cost per EUP for materials = $102,700 / 6,515 = $15.7636 ≈ $15.76

4 0

3 years ago

Which of the following statements is true regarding size of teams?A) The most effective teams have twelve to fifteen members.B)

Gwar [14]

Answer:

The correct option is: B) When teams have excess members, cohesiveness declines

Explanation:

A team is defined as the group of individuals that work together to achieve a common desired goal. The members of a team are known as team members.

The composition and size of the team affects the outcome of the team. The optimal size of the team is considered to be between 5-12 members.

Also, homogeneity and the number of members in the group determines the cohesiveness of the group.

Therefore, if a group has excess team members, the cohesiveness of the group decreases.

3 0

3 years ago