Which type of project cost estimate is the most accurate?a.Order of magnitudeb.Preliminaryc.Conceptuald.Definitive

Break Down the Problem

1. Identify the types of project cost estimates.
2. Determine the accuracy of each type.

Relevant Concepts

• Order of Magnitude Estimate: Typically used in the early stages of a project, these estimates can vary greatly, usually within a range of -25% to +75%.
• Preliminary Estimate: More refined than the order of magnitude estimate, but still relatively broad, usually within -15% to +30%.
• Conceptual Estimate: Developed during the conceptual phase, generally more accurate than preliminary estimates but less so than definitive.
• Definitive Estimate: Based on detailed project information, this is the most accurate form of estimate, often within -5% to +10%.

Analysis and Detail

1. Order of Magnitude: Useful for gauging feasibility but not reliable for budgeting.
2. Preliminary: Better for assessing financial viability but still subject to significant change.
3. Conceptual: Provides a general idea of costs but lacks the precision needed for actual budgeting.
4. Definitive: Considered the most accurate as it is based on comprehensive details including drawings, specification, and various constraints.

Verify and Summarize

In summary, the definitive estimate is the most precise form of project cost estimate, suitable for final budgeting and financial planning.

Final Answer

Definitive is the most accurate type of project cost estimate.