Question: Using the Profit Equation - Exercise 1 Continued ... Page 2 Your Company is about to win another contract worth $422,000 and bid at 14.0%.

Using the Profit Equation - Exercise 1 Continued ... Page 2 Your Company is about to win another contract worth $422,000 and bid at 14.0%. If you win the contract you can perform with your existin team. Let's look at that: You won the contract and added \$422K in Revenue at 14\% GPC. How much New GPC, "Marginal GPC" will this contract add? Contract$GPC%=MarginalGPC Your new Total GPC will be? Marginal GPC + Previous GPC\$ = New GPC\$ How much Profit will Your Company earn with the new contract? New GPCS - OH = New Profit What ROE will Your Company earn with the new contract? New Profit / OE\$ What Profit Margin will Your Company earn with the new contract? New Profit / New Revenue How much is your Bonus if you get 25% earnings over 10% ROE New Profit -NPS =P over 10% ROE .25= Bonus

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