Risks in Capital Budgeting

Risks in Capital Budgeting

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Risks in Capital Budgeting are from five different sources. They are:   Project-specific risk Project-specific risk could be traced to something quite specific to the project. Managerial deficiencies or error in estimation of cash flows or discount rate may lead to a situation of actual cash flows realised being less than the projected cash flow. […]

Project Risk

Project Risk and Sources of Project Risk

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Project Risk is one of the major factors to be considered during the management of a project. Risk can be defined as, “A probability or threat of damage, injury, liability, loss or any other negative occurrence that is caused by external or internal vulnerabilities and may be avoided through pre-emptive action”. In other words, risk […]

ROMS

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ROMS stands for Risk Opportunity and Management System. It can be applied throughout an organisation. This system helps in establishing a practical, integrated, systematic, rigorous and collective approach for managing the risks and opportunities over a business’s or project’s lifecycle. It can also be used for formulating standard operating procedures and understanding the business risks […]

Resource Risk Sources

Resource Risk Sources

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The following are the sources of resource risk   People risks Outsourcing risks Money risks People risks Risks related to people represent the maximum risks (by count) in the PERIL database, accounting for more than two-thirds of the total risk incidents. The sources of people risks can be divided into two main categories, which are […]

Scope Risks

Scope Risks Types

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The following are different type of scope risks   Scope creep Scope gap Scope dependency Scope creep Scope creep is the most common scope risk. It stems from gaps in the understanding or documentation of requirements. It is a dispute between the customer and project team over the scope boundary. In most scenarios, the requirements […]