All five members of a project team create their time estimates, then add 10% as

Question

All five members of a project team create their time estimates, then add 10% as a safety margin and submit their estimates to the project manager The project manager adds the activity length estimates together and adds 10% for his personal safety margin Then, anticipating a cut by top management, adds another 20% to the final submitted project estimate Much to the project managers surprise, top management cuts only 10% off the submitted time estimate How much of a cushion is now built into the project?

Explanation / Answer

>> Let initial amount is "x"

After first adding 10% by team, new becomes "1.1*x"

Now, Project manager first add 10% for his personal safety margin, new amount becomes : 1.1*1.1x = 1.21*x

>> Now, due to anticipation of cut, project manager adds 20 & more, So, final amount is : 1.21*1.2x = 1.452*x

>> As, Management cuts only 10 &, So, final Value becomes " 0.9*1.452 = 1.31*x

>> So, final profit os 1.31*x - 1.0*x = 0.31*x = 31 % ........ANSWER..........

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