CPIF type of contract. The project is nogotiated such that if the FINAL costs are less than EXPECTED costs, the sharing formula for cost saving is 80:20. the targetted cost is $500,000 with a 10% fee. if the project comes in the 450,000, what would be the cost of the total contact?

A. 495K

B. 510K

C. 505K

D. 550K

Just wanted to know how is the incentive fee calculated in this case.

Is it - 10% * Actual Cost or 10% * Expected cost?

I get the other pieces of the puzzle

Actual costs = 450K