Your program is planning to award a contract in January 2015 to purchase 100 missiles at an estimated total cost of $100 million (constant FY 2012 dollars). Currently, for Base Year 2012 in the Missile Procurement Appropriation, the FY 2015 raw index is 1.06 and the FY 2015 weighted index is 1.12. What is the proper amount you should request in the budget for this contract in FY 2015?

Question

Your program is planning to award a contract in January 2015 to purchase 100 missiles at an estimated total cost of $100 million (constant FY 2012 dollars). Currently, for Base Year 2012 in the Missile Procurement Appropriation, the FY 2015 raw index is 1.06 and the FY 2015 weighted index is 1.12. What is the proper amount you should request in the budget for this contract in FY 2015?

Answer 1

100million X weighted index 1.12 = 112 million.

Answer 2

To determine the proper amount you should request in the budget for this contract in FY 2015, we need to consider the inflation and adjust the estimated total cost in constant FY 2012 dollars to FY 2015 dollars using the raw or weighted index.

1. Using the raw index:
Multiply the estimated total cost of $100 million by the raw index of 1.06:
$100 million * 1.06 = $106 million

So, if you use the raw index, you should request $106 million in the budget for this contract in FY 2015.

2. Using the weighted index:
Multiply the estimated total cost of $100 million by the weighted index of 1.12:
$100 million * 1.12 = $112 million

Thus, if you use the weighted index, you should request $112 million in the budget for this contract in FY 2015.