A business school plans a new wing that will cost $16 million to build

Question

A business school plans a new wing that will cost $16 million to build, spread equally over the projected four-year construction timeframe. Halfway through the second year, the amount actually spent on the wing is $10 million. In order to finish the project on budget, the amount spent on the rest of the wing must be how much under the projection for the entire four-year construction period?

A. $1 million
B. $2 million
C. $4 million
D. $6 million
E. $10 million

Kudos for a correct solution.

A. $1 million
B. $2 million
C. $4 million
D. $6 million
E. $10 million

rajthakkar · Answer

IMO C

Halfway through the second year,the amount spent must be 4+2=6 billion and it is $10 billions.So it is $4 billion more.Now to complete under budget,the remaining $10 million work should be completed within $6 million.Though not sure.

So under projection amount 10-6=4 million

please post the OA

PareshGmat · Answer

Answer = B. $2 million

Budget for 2 years = 8 million

Already spent = 10 million

Overspent = 2 million

chetan2u · Answer

hi,

the wording seems slightly awkward..
' the amount spent on the rest of the wing must be how much under the projection for the entire four-year construction period'
you have spent 10.. left-6..and projection for the entire 4 yr is 16 so ans 16-6=10.... ans E..
but if its comparing with the time left and the money left, it should have been worded other way..
also half through 2nd year would mean 1 1/2 half years ...

EMPOWERgmatRichC · Answer

Hi All,

This question is "detail-heavy" and oddly-worded (we're meant to infer some details that the writer isn't perfectly clear about; the fact that 3 different users have provided 3 different answers is interesting too), but I think the "intent" of the question is this:

We're told that a $16 million construction budget is meant to be spread EVENLY over the course of 4 years. This obviously means $4 million per year, BUT I think that we're expected to take that logic further....

Next, we're told that HALFWAY through the 2ND YEAR, the amount spend was $10 million. I think that we're meant to assume that $4 million per year is meant to be spent EVENLY throughout EACH year. If this is true, then halfway through the 2nd year = 1.5 years. In that 1.5 years, we should have spent $6 million; the prompt says that we've spent $10 million, so we're $4 million OVER-BUDGET at that point in time.

We're asked " In order to finish the project on budget, the amount spent on the rest of the wing must be how much UNDER the projection for the ENTIRE four-year construction period?"

Since we're $4 million OVER-BUDGET after 1.5 years, if we want to finish the project ON BUDGET, then the rest of the work needs to be $4 million UNDER BUDGET.

Final Answer:  C

GMAT assassins aren't born, they're made,
Rich

peachfuzz · Answer

Here is my interpretation:

$16 M equally spread over 4 years is $4 M.

Halfway through the second year, $10 M is already spent. That means we only have $4 M to spend over 2.5 years. Originally we were supposed to have $10 M over those 2.5 years ($4 M * 2.5 yrs).
$10 M (what we originally were supposed to have) - $6 M (what we only have left) is $4 M. 
We need to be $4 M underbudget.

Answer: C

chetan2u · Answer

the question asks us  ' under the projection for the entire four-year construction period?' ... and not under the projection for remaining period..
" " In order to finish the project on budget,  the amount spent on the rest of the wing  must be how much UNDER  the projection for the ENTIRE four-year construction period?" ..
if you look at the question stem, it is clearly asking two things
1)the amount spent on the rest of the wing
2)the projection for the ENTIRE four-year construction period
and i think ans to two points above can be straight way picked up..1) 6 to remain on budget and 2) 16...
so ans 10... question is very awkwardly worded but if we read the question the way it is, it means this only unless i am really missing something..
i would like to know where does the question ask about the remaining period?
the ans may still be what all are saying but that intent does not follow from question..

Bunuel · Answer

VERITAS PREP OFFICIAL SOLUTION

Correct Answer: (C)

The problem gives us the timeframe and budget, so we can figure out that each of the four years should cost $4 million. From this, we know that each half year should cost $2 million. Halfway through the second year, the project has been going on for 1.5 years, so we would expect the total cost to be $6 million at that point. Since the actual cost is $10 million, we know the project is $4 million over budget. Thus, we know that the rest of the project must be $4 million under budget for the project to meet the original projection of $16 million. Answer C is correct.

hanyhamdani · Answer

total cost =16 million
each year projection= 16/4= 4 million
spent in 1.5 years= 10 million
for remaining 2.5 years:
 according to earlier projection : 2.5 x 4= 10 million
 available now = 16-10 = 6 million
 short (projection for next 2.5 years)= 10-6 = 4 million

Answer : 4 million

nishantkurup · Answer

Budget = $16 million spread equally over 4 years =  $4 million per year  =  $2 million every 6 months

Now, halfway through the second year means that we have crossed  1.5 years  or  three 6-month periods .
Amount which  should have been spent  as per the budget = $6 million
Amount which  should have been left  as per the budget (Projection) = $10 million

Amount  actually spent  = $10 million
Amount  actually left   as per the budget = $6 million

Hence, in order to finish the project on budget, we must spend $4 million less than the projection of $10 million.

The answer is C.

bumpbot · Answer

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A business school plans a new wing that will cost $16 million to build

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A business school plans a new wing that will cost $16 million to build

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