Escalating budget mid construction? Issues with the Ballast practice exams


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    Anson Nickel

    Hi Rebecca, 

    For budgeting at this stage, you'd want to make assumptions about project length and rough approximations of expenditures. If a project is estimated to take 10 years (ahhh!) and is planned to begin in 2020, it wouldn't be wise to estimate costs in 2020 prices due to inflation. Similarly, it wouldn't make sense to estimate costs in 2030 prices. Why? Because expenditures don't all occur during 1 year (ie - 2020 or 2030). Instead, costs are usually spread out over the course of the project. Using the midpoint of construction is just a rough measure to "average" out costs and inflation during the project. 

    Hope this helps. 





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