You are the project manager on a defence project. The buyer wants to get an idea of how much he will pay for cost overruns. With the following variables, calculate the point of total assumption: Expected Cost=$150,000; Expected Profit=$37,500; Target Price=$187,500; Buyer/Share Ratio=60%/40%; Ceiling Price=$225,000; Maximum Overrun=150%.
(A)$201,875.00
(B)$223,125.00
(C)$212,500.00
(D)$191,250.00
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