Question

Given the following information, calculate the ceiling price: target price=$193; government share of overrun-40/60; CRM-$180; target cost: $170.

O $200
$197
$203
$193

Answer 1

Answer: $185.33.

Explanation: Given the provided information:

Target Price = $193

Government Share of Overrun = 40/60 (or 4/6)

Target Cost = $170

Ceiling Price = $170 + (4/6 * ($193 - $170))

Ceiling Price = $170 + (4/6 * $23)

Ceiling Price = $170 + (2/3 * $23)

Ceiling Price = $170 + $15.33

Ceiling Price ≈ $185.33

Therefore, the ceiling price is approximately $185.33.