Assume that the software team defines a project risk with 80% probability of occurrence of risk in the following manner :

Only 70 percent of the software components scheduled for reuse will be integrated into the application and the remaining functionality will have to be custom developed. If 60 reusable components were planned with average component size as 100 LOC and software engineering cost for each LOC as $ 14, then the risk exposure would be**(A)** $ 25,200**(B)** $ 20,160**(C)** $ 17,640**(D)** $ 15,120**Answer:** **(B)****Explanation:** In the application,

Components = 60 Avg LOC = 100 cost of each LOC = 14 Risk Probability = 80 %

Number of reusable components available = 60

Part of reusable components actually included = 70%

No. of components to be developed from scratch = 30% of 60 = 0.3&60 = 18

Total LOC needed to be written from scratch = 18*100 = 1800

Total cost = 1800*14 = Rs 25200

Probability of occurrence of risk = 80% = 0.8

So, Risk exposure = ( Risk Probability = 0.8 ) x ( Development Cost=25200 ) = 20160

Option (B) is correct.

This explanation is provided by chitrasingla2001.

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