Question

During the software planning process, Rick, a project manager, finds that his team has made an incorrect estimation of funds. What kind of risk has Rick identified? Rick has identified a _________ risk.

Answer 1

Answer:

Rick has identified a cost risk.

Explanation:

Risk is the probability of loss in a given setting. Herein, the risk involved is the inadequate assessment of the costs involved to carry out the project usually as a result of poor pricing evaluation of resources required for the project. At the early stage of every project, effective and efficient cost estimation is needed because it provides a basis for estimation of the total costs, it helps distribute the cost budget, it eases decision making and thereby assuring a level of profitability, everything being equal.

Answer 2

Answer:

Rick has identified a cost risk

Explanation:

Cost risk of project are due to poor cost estimating accuracy and inadequate financial records.

At its barest minimum, project expenses is about numbers: and it involves inflows of revenues and payments of expenses.

Some adding, some subtracting in project expenses calculations, can lead to budget deficit or budget surplus.

Cost risk always incure losses. Total cost risk is the sum of all organisation operations relating to risk.

This risks includes retained losses and related loss adjustment expenses, risk control costs, transfer costs, and administrative costs.