Re: What categories do these expenses fall into ?
- From: Ronald Raygun <no.spam@xxxxxxxxxxxxxxxxxxxxx>
- Date: Thu, 14 Jun 2007 10:25:25 GMT
deepp@xxxxxxxxxxxxx wrote:
On Jun 14, 2:06 am, Peter Saxton <p...@xxxxxxxxxxxxxxxxx> wrote:
You really don't know what to do?
Make Direct Costs £121.
Why , this makes the numbers add up but 120.37 rounded to the nearest
pound is 120, I dont understand the reasoning behind this.
The reasoning is that the imprecision added by rounding sometimes
leads to inaccuracy. Your example shows this. You can't round
all three to nearest and still have the sums balance, and so there
is no alternative but either to abandon rounding altogether, or else
to round one or more of the figures the "wrong" way.
In deciding which figure(s) to adjust, you will probably reckon that
the final total should be most accurate, so you won't adjust that one.
The choice of which of the other two to go for is pretty arbitrary.
You can change them to either £121 and £200 or to £120 and £201,
but you will observe that 37p is nearer than 25p to 100p, and from
that point of view it makes more sense to round £121.37 up than
£200.25 up, on the basis that it creates the smaller absolute error.
Or you could do it on the basis of smaller relative error.
Rounding 200.25 up is 75p out, a 0.37% error.
Rounding 120.37 up is 63p out, a 0.52% error.
From this point of view it would be better to make Admin Costs £201.
Horses for courses.
.
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