Firm-Fixed Price Contract A firm fixed-price contract (FFP) is a type of contract in which the buyer and seller agree on a fixed price for the product or service being provided. The price is set in advance and does not change, regardless of any cost overruns or changes to the scope of work. Under a firm fixed-price…
Fixed Price Incentive FeeContract (FPIF) A Fixed Price Incentive Fee Contract (FPIF) is a type of contract used in government contracting and project management, where the contractor is paid a fixed price for completing a project or delivering a product or service, with an added incentive fee for meeting or exceeding certain performance targets. Under an FPIF…
Fixed Price with Economic Price Adjustment (FPEPA) The Fixed Price with Economic Price Adjustment (FPEPA) contract is used in project management to set a fixed price for a project, with changes based on how the economy is doing. This kind of contract can help project managers deal with risk by giving them a way to handle changes…
Internal Rate of Return (IRR) The International Rate of Return (IRR) is a financial measure used to figure out the rate of return on a property that uses more than one currency. It looks at the value of money over time and the exchange rates between the country where the investment is made and the country where…
Return on Investment (ROI) Return on Investment (ROI) is a business term for a way to measure how profitable an investment is. It compares the amount of profit or return an investment makes to how much it cost to make the investment. ROI is used to figure out if a project or business is financially viable. It…
Net Present Value (NPV) Net Present Value (NPV) is a financial calculation that is used to figure out the current value of future cash flows after taking into account the time value of money. When calculating NPV, the original investment, projected cash flows over time, and needed rate of return or discount rate are all taken into…
PMP Math Essential Mathematical Formulas for PMP Certification Test Formula A = B + C Learn More In project management, ACWP (real Cost of Work Performed) refers to the real expenditures incurred to execute various tasks or activities in a project. Practice Test Go Example Assume you’re working on a home improvement project, and one of the…
PMP Math Essential Mathematical Formulas for PMP Certification Test Formula A = B + C Learn More BCWP (Budgeted Cost of Work Performed) refers to the entire budget or cost that was intended to be spent on various tasks or activities up to a given point in time in project management. Practice Test Go Example Assume you’re…
