Question

Assumptions Terms of the FFP contract specify an 80% advanced payment rate. Total contract value is $1,000,000 including $120,000 of profit. ITD Costs to date are $300,000 and the latest EAC Cost is $900,000.

Answer 1

To calculate the advanced payment rate specified in the FFP contract, multiply the contract value without profit by 80%, is $704,000..

Step-by-step explanation:

To calculate the advanced payment rate specified in the FFP contract, we first need to determine the total contract value after subtracting the profit. The total contract value is $1,000,000 and the profit is $120,000, so the contract value without profit is $880,000. To find the advanced payment rate, we multiply the contract value without profit by 80%:

Advanced Payment Rate = $880,000 * 0.8 = $704,000

Therefore, the advanced payment rate specified in the FFP contract is $704,000.