Given the following data with the direct costs for each activity as shown, calculate the ROR of the contractor.

Assume that

(a) the markup is 15%;

(b) retainage is 5% on the first 50% of worth, and 0% thereafter;

(c) payment requests are submitted at the end of each month, and payments are received one month later; and

(d) the finance charge is 1% per month of the amount of the overdraft at the end of the month.

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Timing and allocation Indirect costs $5000/month $25,000 5,000 $30,000 $65,000 5,000 $70,000 $75,000 $15,000 Total direct costs $80,000 5,000 Total indirect costs 5,000 $20,000 $180,000 $20,000 $200,000