medium · Project Management Professional Predictive (Plan-Driven)
A Coveport project manager is calculating the PTA for a vendor contract. The values are: Ceiling Price = 1,250,000, Target Cost = 1,000,000, Target Fee = 100,000, and Buyer Share Ratio = 0.8. The PM's calculation results in 1,187,500.
What does this PTA value represent in terms of seller risk?
- The cost level where the seller's fee is exactly zero.
- The point where the project manager must escalate to the Change Control Board for more funding.
- The maximum amount the buyer will ever have to pay for the contracted work.
- The point beyond which the seller bears 100% of every additional dollar of cost.
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