Internal assessment is best used when investment scopes are large and benefits may not be dramatically higher or lower than costs within what range?

• A. ±10%
• B. ±30%
• C. ±50%
• D. ±70%

Answer: (B)

When evaluating large investments with uncertain benefits, you want a method that can tolerate some estimation error without overreacting to it. Internal assessment works well when the expected benefits aren’t likely to swing far from the costs, so a reasonable margin around the estimates is acceptable. In this context, about plus or minus 30 percent provides that balance: it allows for the typical uncertainties in large projects while still keeping the analysis meaningful. If the range had to be much tighter, like 10 percent, the method would be too fragile for large, uncertain investments. If the range were much wider, like 50 or 70 percent, the assessment would be too imprecise to guide a reliable decision. So the best fit is roughly a ±30% range.