Contingency Reserve Total: US$213,000
Due to a mitigation strategy. Risk 4's probability has been reduced to 40%.
What would be the new contingency reserve total?
Contingency Reserve Total: US$213,000
Due to a mitigation strategy. Risk 4's probability has been reduced to 40%.
What would be the new contingency reserve total?
To calculate the new contingency reserve total after reducing Risk 4's probability to 40%, we need to recalculate the contingency reserve for Risk 4. The current contingency reserve for Risk 4 at 80% probability is $112,000. If the probability is reduced to 40%, the contingency reserve should also be proportionally reduced by half. Therefore, the new contingency reserve for Risk 4 would be $56,000. Adding the new contingency reserve for Risk 4 to the unchanged contingency reserves for the other risks ($3,000 + $8,000 + $90,000), we get a new total contingency reserve of $157,000.
Answer is D Lets see the contingency reserve calculated for Risk 4 with .80 probability is incorrect. So if you divide it by 2 and then add through the result is wrong. So Answer id D
risk 4 reserve has been reduced by half from $112,000 to $56,000. therefore the total contingency reserve is also reduced by $56,000 --> $213,000- $56,000=$157,000 c is correct
C is the correct answer
Half of $112,000 and then add to the rest .
The method they used is (O+ML+P)/3. So 112k CR for the last risk is okay. Its summing up to 157k - option C
This question has a host of problems, but I agree with RoyalWarrior's assessment
It should be 96,000 so information is wrong. So answer is D
Figure of 112,000 for the last risk is incorrect.