Math Qn
Submitted by BK on Sun, 05/12/2013 - 16:06
What is the target cost on the following contract:
PTA=1800,000; Target profit: 150,000; Target price: 1700,000; ceiling price: 1850,000.
Share ratio: 75% to 25% (Buyer to seller) for overruns, 60% to 40% for underruns.
1. 1600,000
2. 420,000
3. 1800,000
4. 200,000
I am confused for sharing ratio which one to use?
How we come to know that it is overrun or underrun befor calculation?
