Why (-) in gain - Risk Question?
Submitted by Jewahir on Tue, 07/09/2013 - 01:19
Forums:
Q1) you are a project for a major telecommunication network with a NPV 10,000,000US. You are heavily dependent on third party for your project and your contract office inform you that there is a chance of 30% that the vendor will go out of business at the end of the quarter. if that occurs, your project will incur a US 3,000,000 cost overrun due to rework. Theres also 30 percent chance that a new legislation will pass that will decrease government oversight of your team's work.
