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Homework answers / question archive / Given are the statistics for a Project
Given are the statistics for a Project. Target Cost = $150,000; Target Fee = $30,000; Target Price = $180,000; Sharing Ratio = 60/40; Ceiling Price = $200,000; Actual Cost = $190,000. Calculate the Fee and the Final Price for the project.
Fee = $30,000, Final Price = $190,000
Fee = $14,000, Final Price = $204,000
Fee = $14,000, Final Price = $200, 000
Fee = $30,000, Final Price = $180, 000
Computation of the fee for the project:-
Seller's sharing ratio = 40%
Buyer's sharing ratio = 60%
Fee = ((Target cost - Actual cost) * Seller's sharing ratio) + Target fee
= (($150,000 - $190,000) * 40%) + $30,000
= (-$40,000 * 40%) + $30,000
= -$16,000 + $30,000
= $14,000
Computation of the final price for the project:-
Final price = Actual cost + Final fee
= $190,000 + $14,000
= $204,000
Correct option is 2). Fee = $14,000, Final Price = $204,000
