Project Management

The probability ofany given point going up or down or being above or below the mean is 5-50. The probability of seven observation being consecuively in one dirrection or above or below the mean would be calculated as 0.0078 (i:e much less than 1%)

In a control chart, the "rule of seven" is a heuristic stating that if seven or more observations occur in one direction either upward or downward, or a run of seven observation occurs above or below the mean, even though they may be within the control lines, they should be investigated to determine if they have anassignable cause.
The reason for this cause is that, if the process is operating normally, the observation will follow a random pattern, it is extremely unlikely taht seven observation in a row would occur in the same dirrection above or below the mean.

The following are the additional terms related to the prject selection:
Depreciation: Large assets (e.g., equipment) purchased by a companylose value over time. Accountings standard call this depreciation. Several methods are used to account for depreciation. The two information is all you need to know.

There are two forms of depreciation:
1. Straight Line Depreciation: The same amount of depreciation is taken each year.
2. Accelerated Depreciation: There are two forms of accelerated depreciation
a. Double declining balance.
b. Sum of the years digit.
Accelerated depreciation depreciates faster than straight line depreciation.