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# TOPIC: Point of total assumption (PTA)

## Point of total assumption (PTA) 3 years 11 months ago #23841

 Pascal Wollny Topic Author Offline Fresh Boarder Posts: 9 Thank you received: 0 Hello everyone, I hope it is OK to post a question I've come across in another mock exam which I've done before tackling the Prepcast exams. If not, my apologies and feel free to remove the post. Any advice on the below would be much appreciated, thank you. In a project, a cost incentive contract has been awarded to a contractor with the following parameters: Target cost: \$1,000,000 Target contractor fee: \$100,000 Cost benefit sharing ratio: 80%/20% Price ceiling: \$1,200,000 What is the point of total assumption (PTA, breakpoint) of the project? a. \$1,000,000 b. \$1,100,000 c. \$1,125,000 d. \$1,200,000 The answer key says it is c, however following the formula PTA = target cost + (ceiling price – target price) / % share of cost overrun = \$1,000,000 + (\$1,200,000 - \$1,100,000) / 0.8 = \$1,375,000 , I don't seem to arrive at any of the answer options listed. Am I missing a trick here? Perhaps something to do with the contractor fee? Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.

## Point of total assumption (PTA) 3 years 11 months ago #23842

 Gabriella Dellino, PMP Offline Gold Boarder Posts: 266 Karma: 24 Thank you received: 93 Hi Pascal, the formula is correct, as well as the way you combined the target contractor fee and cost to get the target price. The only thing you may be missing here is the right operator precedence to follow in the formula. In fact, starting from the formula, you should compute it as follows, starting from the operations in brackets: PTA = \$1,000,000 + [(\$1,200,000 - \$1,100,000) / 0.8] = 1,000,000 + [100,000 / 0,8] = 1,000,000 + 125,000 = 1,125,000 which leads you to the correct answer, option c. Gabriella P.s.: would you mind sharing information about where you found this sample question, so that we can give proper attribution? Thank you. Gabriella Dellino, PhD, PMP PMPrepCast Community Moderator Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable. Last edit: by Gabriella Dellino, PMP.

## Point of total assumption (PTA) 3 years 11 months ago #23846

 Harry Elston Offline Moderator Posts: 468 Karma: 27 Thank you received: 146 Gabriella beat me to it. It's that whole arithmetic thing. Harry +++++ Harry J. Elston, Ph.D., CIH, PMP Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.

## Point of total assumption (PTA) 3 years 11 months ago #23850

 Pascal Wollny Topic Author Offline Fresh Boarder Posts: 9 Thank you received: 0 Thank you so much, what a rookie mistake! Sure, the question is from www.oliverlehmann.com/contents/free-down...Sample_Questions.pdf Your e-mail address will never be displayed on the site. Check this box to be notified of replies to this topic. Note: BBcode and smileys are still usable.
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