A contingency rate of 10% on a building project budgeted at $20 million means:
A) the project organization is hoping to bring the project in for around $22 million.
B) the project organization is hoping to bring the project in for around $2 million.
C) the project organization is hoping to bring the project in for around $18 million.
D) the project organization is hoping to bring the project in for around $200 million.

Question

Quizplus · Accepted Answer

A contingency rate of 10% means that the organization has set aside 10% of the project budget as a buffer for unforeseen expenses or risks. This would bring the total budget for the project to $22 million. However, since the question is asking what the organization is hoping to bring the project in for, we subtract the contingency rate from the budgeted amount to get $18 million. Therefore, the project organization is hoping to bring the project in for around $18 million.

A Contingency Rate of 10% on a Building Project Budgeted