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Escalation in an estimate is the allowance for

  • A.quantities that were overlooked in the take-off
  • B.risks that may or may not materialise
  • C.the difference between two accuracy classes
  • D.price rises between the estimate date and the spend

Answer: D

Money will be spent over the years following the estimate, and prices will have moved by then, so the allowance is a forecast of that movement. It is distinct from contingency, which covers what the estimate got wrong rather than what the market does.

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