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Procurement Calculation Final Fee

Submitted by sspram on Fri, 01/27/2012 - 16:02

 

 I have a problem as under :

Given are the statistics for a Project. Target Cost = $220,000; Target Fee = $35,000; Target

Price = $255, 000; Sharing Ratio = 80/20; Actual Cost = $200,000. Calculate the Fee and

Final Price for the project

a) Fee = $35,000, Final Price = $235,000

b) Fee = $39,000, Final Price = $239,000

c) Fee = $39,000, Final Price = $255,000

d) Fee = $55,000, Final Price = $255,000

It is given that the answer is D) but, if I apply the formula for the final fee and final price calculation(TC-AC) * Seller ratio + Target fee - this comes only to (220,000 -200,000)*.2+35000

39000 and 255,000.

I would aprpeciate if any any clarifies that how the answer is D.

Advance Thanks

SSP

 

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Hi The Correct Answer is

Submitted by cnu_pmp on Sat, 01/28/2012 - 00:24.

Hi

The Correct Answer is B

Target Cost : $220,000
Target Fee : $35,000
Target Price :$255,000

Sharing Ratio : 80/20

Actual Cost :$200,000

Final Fee : (Target Cost - Actual Cost) * 20 % + Target Fee

Final Fee : ($220,000 - $ 200,000) * 20% + $35,000  = $39,000

Final Price = Actula Cost + Final Fee

Final Price = $200,000 + $39,000 = $239,000

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