I got this question Scordo's simulator:
Q) You have recently joined an organization as the procurements manager. You have just received an invoice from a contractor. Some of the items from the invoice are as follows: EV of work completed to date: $50,000 AC of work completed to date: $40,000 Total costs reimbursed by the buyer to date: $35,000 If the contract between the buyer and the contractor is a CPIF contract, what is the total value payable to this contractor? (Assume that the contract allows for a 10 percent fee over net payable whenever CPI > 1).
Answers) I choose the answer as $44,000. However the solution offered says the answer as $5,500. Surprisingly, the incentive is being calculated on the remaining payment to be made. (In this case it is $5,000). I am really confused on this. In the case CPIF contract, the incentive is calculated on the total actual cost or the cost that is yet to be paid to the supplier.
Any help is greatly appreciated.
Thanks,
Saravanan