Exam2-0

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· There is a 30 percent chance that a new product development project will result in sales of $500,000 and a 70 percent chance that the project will result in sales of $100,000. What is the expected value of the project o $220,000 · Which of the following is not true regarding top-down budgeting? o The overall budget is generally not very accurate · Which of the following is not true regarding bottom-up budgeting? o The method tends to be inaccurate in the detailed tasks · After major risks are identified, which of the following data should not be obtained for analysis o The person responsible for each outcome · Activity budgets show expenses by task and expected time period of the expenditure o False · Expected value is a tool for risk analysis o True · Learning curve theory states that performance of labor per unit will improve by a percentage each time production increases by the same percentage o False · Individual elements of project budgets are generally more accurate in bottom up budgeting o True
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