Eligible stored material is invoiced at $96,000 and the contract allows 90% payment on stored materials. What amount is payable for that material?
Correct Answer
A) $86,400
Payment is $96,000 x 90% = $86,400.
Why This Is the Correct Answer
Payment is $96,000 x 90% = $86,400.
Why the Other Options Are Wrong
Option B: $9,600
stored material payment, choice a: $96,000 x 0.1 gives $9,600. That calculation follows multiplies those two listed numbers.
Option C: $90,000
stored material payment, choice b: $90,000 backs into 100,000 when divided by 90%; the accepted setup gives 96,000 on that same base.
Option D: $106,667
stored material payment, choice d: $106,667 is produced by $96,000 / 90%. The error is using that partial/alternate setup instead of Payment is $96,000 x 90% = $86,400.
Memory Technique
Store stored material payment with its last math move; nearby answers are usually unfinished versions of $86,400.
Reference Hint
Open NASCLA Contractors Guide to Business, Law and Project Management, 14th Ed.; use the index entry or section for "stored material payment" to confirm that Payment is $96,000 x 90% = $86,400.
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