sara asked in Business & FinanceCorporations · 1 decade ago

Both Tom and the board of Engineers reported on the cost overrun problems in separate letters to shareholders.

What's the meaning of " Cost overrun Problems"?

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  • 1 decade ago
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    Every budget for manufacturing a product or installing a service, or hiring a new group of employees, or whatever has to be projected and written up in a detailed way prior to the beginning to the project's start.

    In most cases, when businesses propose an idea and draw up a budget for how much everything is going to cost, from the printing of blueprints, to the unveiling ceremony.... they usually come in on target. After all, its an investment. Others turn into total nightmares, and during the course of the project, it starts and stops due to the need to secure more funds.

    In this situation, the shareholders make up the investors in this public company. The board of engineers is probably articulating in their letter a detailed plan for all the fine details that the project will accomplish. Where as 'Tom' might just be a company president or executive writing a letter in a way to drum up support, build value, and confidence in what they're doing despite the 'cost overrun problems'.

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