The firm set aside a little extra money just in case an unforeseen element of cost pushed the project beyond what they had budgeted.This extra money is called:
A)A rainy day fund.
B)A contingency reserve.
C)An escalation clause.
D)A sinking fund.

Question

Quizplus · Accepted Answer

A contingency reserve is money set aside to cover unforeseen costs. A rainy day fund is a broader term and might refer to money set aside for emergencies or unexpected events. An escalation clause is a contract provision that allows for future adjustments based on certain conditions, such as inflation. A sinking fund is typically used to set aside money for a specific purpose, like paying off debt. Therefore, the best choice for this scenario is B, a contingency reserve.

The Firm Set Aside a Little Extra Money Just in Case