Do you need customer support or technical assistance? Click here to submit a support ticket...
 Page:1

# TOPIC: 175 Oliver Lehman (question 46)

## 175 Oliver Lehman (question 46) 7 years 5 months ago #8715

 Maria Eugenia Labajos Topic Author Visitor 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? o \$1,000,000 o \$1,100,000 o \$1,125,000 o \$1,200,000 Can someone explain to me why C is the correct choice? Thanks in advance! 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.

## 175 Oliver Lehman (question 46) 7 years 5 months ago #8719

 Hazem Ibrahim Offline Senior Boarder Posts: 58 Thank you received: 2 the target price for the given information is the sum of the target cost plus the target fee i.e 1000000 +100,000 =1,100,00 then the equation will be applicable as follow PTA ={ (ceiling price - target price) /buyer ratio} + target cost PTA=( 1,200,000 - 1,100,000)/0.8 +1000,000 {100,000/0.8} + 1000,000 = 1,125,000 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.

## 175 Oliver Lehman (question 46) 7 years 5 months ago #8720

 Hazem Ibrahim Offline Senior Boarder Posts: 58 Thank you received: 2 please not that a price is referred to the amount will be payed by the buyer while the cost is referred to the amount will be payed by a seller. in another word the price is how much a buyer will pay to buy the service/ product/ result while the cost is how much the it will be costed by the seller 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.
 Page:1
Moderators: Yolanda MabutasMary Kathrine PaduaJohn Paul BugarinHarry ElstonJean KwandaDaniel SoerensenElena ZelenevskaiaChristian ElmerChristine Whitney, PMP

OSP INTERNATIONAL LLC
OSP INTERNATIONAL LLC
Training for Project Management Professional (PMP)®, PMI Agile Certified Practitioner (PMI-ACP)®, and Certified Associate in Project Management (CAPM)®