Question

Budget reserves are reserve setups to cover identified risks that may occur and influence baseline tasks or costs. These reserves are typically controlled by the project manager and the project team. What are budget reserves?

1) Reserves set aside to cover unforeseen problems
2) Reserves set aside for unnecessary overruns
3) Reserves set aside for project delays
4) Reserves set aside for project owner or project manager

Answer 1

1) Reserves set aside to cover unforeseen problems.

Budget reserves are funds set aside within a project budget to cover unexpected problems that may arise, managed by the project manager and team.

Step-by-step explanation:

Budget reserves are funds allocated within a project's budget to address unforeseen problems that might arise during the course of the project. Budget reserves are funds set aside within a project budget to cover unexpected problems that may arise, managed by the project manager and team.

These reserves are used as a financial safety net, allowing flexibility and providing security against potential overruns or delays not explicitly outlined in the initial budget. To encapsulate, these reserves are managed by the project manager and team to ensure the project can adapt to any unexpected financial demands, thereby safeguarding the project's completion according to its goals and timelines.