$2024$ PCM$470$S GROUP TASK$\_$PT

DUE DATE $10$ MAY $2024$ AT $2359$

EMAIL TO

matandej@cput.ac$.$za

Instructions: Attempt all questions and show all calculations. No calculation, no answer. Group size MUST be a minimum of $5$ and maximum of $7$ members.

Power Engineering is subcontracted to provide technical support for a new hydrogen manufacturing plant in Northwest Province, South Africa. They entered a contract with the following condition.

The subcontract is valued at $R10$ million. Should the works be completed to the client's satisfaction at a cost lower than its agreed value, then the subcontractor shall be entitled to a cost$-$saving incentive of $50\%$ of the savings. On the contrary, should the costs be exceeded, the subcontractor shall be held accountable and pay the full extra costs incurred. Calculate how much Power will get or pay $($in incentives$)$ under the following conditions.

$1\mathrm{.}1.$ The works are finished at a cost of $R7$ million.

$[6$ marks$]$

$1\mathrm{.}2.$ The works are completed at a cost of $R11$ million.

$[6$ marks$]$

$2..$ Indicate how much profit or loss Siyazama Projects $($Pty$)$ Ltd will make under the following fixed price contracts.

a$)$ Siyazama was contracted to pave a $20km$ road at a fixed cost of R$18$ million. The project costed R$11$ million.

b$)$ Siyazama charged Bows Investments R$5$ million to build a small bridge. The project cost was R$5$ million.

c$)3.$ Siyazama charged R$200$ million to repair flooddamaged powerlines. The total cost was R$250$ million.

$]=[9$ marks

Your organisation is considering whether to hire or buy construction equipment for a cost$-$constrained social housing project they recently secured. If you buy, the cost is two million rand $(R2500,000),$ and the cost of procurement and integrating in your company is three hundred and fifty thousand rand $(R450,000).$ If you hire, you pay two hundred thousand rand $(R300,000$ per month for $9$ months. The additional overhead costs apportioned to hiring it will be $R500,000.$ Which option will you choose$-$ buy or hire? Show all calculations. $[10$ marks$]$

The table below shows a cost$-$plus incentive contract for a project with a floor of $R40$ million, a target of $R50$ million and acoiling of $R70$ millinn If the client meets