Question: 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

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.1.1. The works are finished at a cost of R7 million.1.2. The works are completed at a cost of R11 million.[6 marks][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 R18 million. The project costed R11 million.b) Siyazama charged Bows Investments R5 million to build a small bridge.The project cost was R5 million.c)3. Siyazama charged R200 million to repair flood-damaged powerlines. The total cost was R250 million.

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