Oliver 75 - 16th Question

suhail1097@gmail.com
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Oliver 75 - 16th Question

Postby suhail1097@gmail.com Sun Oct 04, 2015 3:51 pm

Hi Friends,

I need help in following PTA question
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

what i know about PTA formula is Price PTA = (Ceiling Price – Target Price) / Buyer’s Share Ration + Target Cost

My confusion is in cost sharing 2 value is given i.e. 80%/20%, hence I am not able to solve this question

Pls help
ujjal_show
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Re: Oiver 75 question q. no. 16

Postby ujjal_show Sun Oct 04, 2015 7:09 pm

Buyer’s Share Ration =80%

Answer should be =$1'125'000
suhail1097@gmail.com
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Re: Oiver 75 question q. no. 16

Postby suhail1097@gmail.com Mon Oct 05, 2015 7:52 am

Hi Friend,

I am putting the formula as =(1200000-100000)/0.8+1000000 but it is not giving me the desired value

Pls give some more insight

Thanks,
Suhail
vivek3377
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Re: Oiver 75 question q. no. 16

Postby vivek3377 Tue Oct 06, 2015 3:59 am

Try this -
Total Price = Target Cost + Target Fee = 1,000,000 + 100,000 = 1,100,000
PTA = ((Ceiling price - Target Price)/ buyers share) + Target Cost
PTA = ((1,200,000 - 1,100,000)/0.8) + 1,000,000
PTA = (100,000/0.8) + 1,000,000 = 125,000 + 1,000,000 = 1,125,000
suhail1097@gmail.com
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Re: Oiver 75 question q. no. 16

Postby suhail1097@gmail.com Tue Oct 06, 2015 7:34 am

thanks I am clear now
jyotimayank
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Re: Oliver 75 - 16th Question

Postby jyotimayank Tue Apr 05, 2016 7:49 am

For more insight of this topic please refer to the following links
Blog
http://www.izenbridge.com/blog/pmp-exam ... ssumption/

Video
http://www.izenbridge.com/videogallery/ ... zenbridge/
Jyoti Gupta
PMP Mentor & Coach

iZenbridge Consultancy Pvt Ltd

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