Question: Practice Question: 1 You sign a FPIF contract with a seller with the following parameters: Target Cost = 420,000 USD Target Profit = 40,000 USD

Practice Question: 1
You sign a FPIF contract with a seller with the following parameters:
Target Cost = 420,000 USD
Target Profit = 40,000 USD
Target Price = 460,000 USD
Ceiling Price = 525,000 USD
Share Ratio = 60/40
The contractor completes the contract for 440,000 USD. Calculate the actual profit received by
the seller, and what is the actual price of the contract?

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