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A fixed-price-plus-incentive-fee (FPI) contract has a target cost of 130,000. The contractor's fee is 25,000. The company agreed to pay a guaranteed maximum price
A fixed-price-plus-incentive-fee (FPI) contract has a target cost of 130,000. The contractor's fee is 25,000. The company agreed to pay a guaranteed maximum price of 160,000 (including the contractor's fee), and the contract has a share ratio of 80/20. The actual cost of the project was 150,000. Calculate the fee and the total money paid to the contractor. fee= total money paid to contractor= (Hint: For the share ratio, In the case of any savings on cost, the company gets 80% of the savings and the contractor gets 20%. This money will be added to the contractor's fee. Similarly, if there are no savings, the company will be penalized 80% and the contractor 20%. This money will be subtracted from the contractor's fee)
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