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# Final Contract price of a CPIF Contract

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Given the following information regarding a CPIF contract, what would be the final contract price at the different final cost amounts.

Target Cost \$2,000,000
Target Fee \$ 150,000

Share Ratio:

Under Target 90/10
Over Target 80/20
Maximum Fee \$ 240,000
Minimum Fee \$ 60,000

a. Final cost is \$1,000,000
b. Final Cost is \$1,800,000
c. Final cost is \$2,150,000
d. Final cost is \$2,400,000

#### Solution Summary

Given the following information regarding a CPIF contract, what would be the final contract price at the different final cost amounts.

\$2.19

## Cost Plus Incentive Fee Contract

1. Given the following data, develop an appropriate CPIF pricing arrangement.

Cost Fee
Target \$100 \$10
Optimistic \$ 80 \$12
Pessimistic \$120 \$ 7

a. What should be the maximum fee?

b. What should be the minimum fee

c. What should be the under-target share ratio?

d. What should be the over-target share ratio?

e. What is the range of incentive effectiveness?

2. Given the following data for CPIF pricing arrangement

Target Cost \$200
Target Fee \$ 16

Share Ratios:

Under target 80/20
Over target 85/15
Maximum Fee \$ 26
Minimum Fee \$ 10

What is the range of incentive effectiveness?

3. Given the following information regarding a CPIF contract, what would be the final contract price at the different final cost amounts.

Target Cost \$2,000,000
Target Fee \$ 150,000

Share Ratio:

Under Target 90/10
Over Target 80/20
Maximum Fee \$ 240,000
Minimum Fee \$ 60,000

a. Final cost is \$1,000,000

b. Final Cost is \$1,800,000

c. Final cost is \$2,150,000

d. Final cost is \$2,400,000

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