📊 GMAT Exam Prep

Memo 1 (from Project Manager): 'Project X is 80% complete, but a critical component from Supplier A is delayed by two weeks, pushing our completion date. We estimate a 15% cost overrun due to expedited shipping if we stick to the original deadline.' Memo 2 (from CFO): 'The board has mandated that all projects must conclude within their original budget and scope, and any deviation requires direct CEO approval.' Which statement is most accurately inferred from the memos?

A The CEO has already approved the expedited shipping for Project X.
B Project X will likely exceed its original budget unless the CEO approves an exception.
C Supplier A is solely responsible for all cost overruns on Project X.
D The project manager has decided to absorb the cost overrun within their department's budget.

✓ Correct Answer: Option B

Memo 1 states a 15% cost overrun is estimated, and Memo 2 mandates all projects conclude within budget unless the CEO approves a deviation. Thus, Project X will exceed budget without CEO approval.

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