question on..point of total assumption, break point

[Somesh Sahu]

You are running a project for a customer based on a cost-reimbursable contract with the following terms:   Target costs:     $ 1,000,000 Fixed fee: $ 100,000 Benefit/cost sharing: 80% / 20% Price ceiling: $ 1,200,000 Which is the PTA (= point of total assumption, break point) of the project?
		$1,300,000
		$1,500,000
		$80,000
		$1,125,000

For cost reimbursable contract, Point of Total Assumption (also referred to as break point) is calculated by the following formula: PTA = [{(Ceiling Price - (Target Cost+Fixed fee))/Benefit Sharing} + Target Cost]

Example: target Cost = 1,000,000; Fixed Fee = 100,000; benefit/cost sharing = 80%/20%; Price ceiling = 1,200,000

PTA = {(1,200,000 - (1,000,000+100,000))/0.80}+1,000,000 = 1,125,000 

[Balkrishna Bellatti]

Valuable input thanks keep sharing the details
Thanks


With Regards

Balkrishna Bellatti		Outer Ring Road,Manyata ITPark
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From:	Somesh Sahu <somes...@gmail.com>
To:	pmpque...@googlegroups.com
Date:	09/11/2012 05:03 AM
Subject:	question on..point of total assumption, break point
Sent by:	pmpque...@googlegroups.com

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