ACCA Financial Management (F9) Certification Practice Exam

What occurs to uncertainty as the length of a project increases?

1. It diminishes

2. It remains constant

3. It can increase

4. It becomes predictable

The correct answer is: It can increase

As a project extends over a longer time frame, the level of uncertainty generally increases. This phenomenon occurs because longer durations introduce more variables and potential changes that can impact the project’s outcomes. For example, market conditions may fluctuate, regulations can change, technological advances might emerge, and workforce dynamics can shift, each contributing to increased unpredictability. Moreover, with a longer project duration, more external factors come into play, such as economic trends and environmental changes, which were not present or influential at the project's outset. These variables collectively increase the risk profile of the project, making it harder to predict the final results. Therefore, the correct answer effectively captures the reality that as time progresses, the uncertainties surrounding project completion and outcomes tend to escalate rather than diminish or stabilize.