Question
The buyer is not confident on the actual start date of the project, so for this procurement, a target start date and a Fixed Price
The buyer is not confident on the actual start date of the project, so for this procurement, a target start date and a Fixed Price with Economic Price Adjustment contract are used. The buyer and seller agree on 4 quarters per year, and a 3.3% per quarter (Q) of +/- change (delayed + 3.3%/Q, earlier -3.3%/Q). The fixed price for the contract is $1700007.00 CAD, and the target start date is April 18, 2020.
a)What is the quarter(s) change that takes place from the target start date if the actual start date is April 18, 2019?
b)What is the total contract price with economic price adjustment if the project starts on April 18, 2019 (round answer to a full dollar, no cents)?
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aThe first quarter change would be a 33 increase in price since the project is starting one year lat...Get Instant Access to Expert-Tailored Solutions
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Corporate Financial Management
Authors: Glen Arnold
5th edition
978-1292178066, 129217806X, 273758837, 978-0273758839
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