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ANSWERS - HURDLE 20 : DATA INTERPRETATION - Liquidated Damages of Construction company.

Ans1. 69,80000

Ans2. 68,80000

Ans3. 72,55000

Ans4. 48,95000

Ans5. 71,00000

Hurdle 20 : Data Interpretation
A construction company took a contract for building 6 identical residential projects (P1,P2,P3,P4,P5,P6) with the
Hurdle20.htm

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Ans6. 61,50000

Ans7. 70,90000

Ans 8. 65,00000

Ans 9. 72,40000

Ans10. 70,70000

Ans11.Option 5 will lead to minimum loss (28.5 lakh) with profit 71 lakh.

Ans12.Option 4 would lead to maximum loss( 50.55 lakh) with profit 48.95 lakh.

Ans13. Option 10, the loss would be 20.8 lakh.

Ans14. Option 4, the loss would be 50.55 lakh.

Ans15.Option 8 would minimise the loss. The loss would be 17.25 lakh.

Ans16. Option 4, the loss would be 50.55 lakh.

Ans17. C , Ans18. E , Ans19. H , Ans20. G , Ans21. J , Ans22. M , Ans23. K ,

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SOLUTIONS :

the Liquidated damages for delay for some of the days is as follows :
Day 20 : 200000 (10000*20)
Day 40 : 440000 (200000+ 1,2000*20)
Day 60 : 740000 ( 440000+ 15000*20)
Day 65 : 840000 (740000 +20000*5)
Day 66 : 860000 (740000 +20000*6)
Day 70 : 940000 (740000 +20000*10)
Day 85 : 1265000
Similarly the penalty for other days can be calculated.

Consider option 1:
Total penalty for delay will be the sum of penalty of 85 days, 65 days, 45 days= 1265000 + 840000 + 515000 =2620000
Implementation cost = 350000
So Total loss = 2620000+350000= 2970000
So profit of company if this option is select = 9950000-2970000= 6980000
It is given that if all the projects were delivered on time the profit would be 99.5 lakh. (1st paragraph)

If the company gets bonus of 2 lakh for each project delivered on time in option 1 the bonus received will be 6 lakh as 3 projects
will be delivered on time. Then the loss when implementing this option would be 2970000- 600000= 2370000 and the profit
would be 9950000-2370000= 7580000

If the implementation cost is reduced to half the cost of implementing this option will be : 2620000+ (350000/2)= 2795000 and thus profit would be 9950000-2795000= 7155000

Similarly it can be solved for other options as well.

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