Your program has an RDT&E-funded project scheduled to start in July 2005 which is expected to take 12 months to complete. The project is expected to cost a total of $12 million (then-year dollars), with cost expected to be incurred at a rate of $1 million per month. The services to be provided under this project are severable. Which two of the following are appropriate budget requests for this project? (There are TWO correct answers here.)
$3 million for FY05 and $9 million for FY06
$12 million for FY05 and $0 million for FY06
$12 million for FY04 and $0 million for FY05
$3 million for FY04 and $9 million for FY05
$3 million for FY05 and $9 million for FY06
To determine the appropriate budget requests for this project, we need to consider the start and end dates, the expected duration, and the rate of cost incurred per month.
In this case, the project is scheduled to start in July 2005 and is expected to take 12 months to complete. The total cost of the project is $12 million, with an expected monthly cost of $1 million.
Now, let's analyze the options provided:
1. $3 million for FY05 and $9 million for FY06: This option seems appropriate as it accounts for the 12-month duration of the project. $3 million would cover the costs incurred in FY05 (including July 2005), and $9 million would cover the remaining 9 months in FY06.
2. $12 million for FY05 and $0 million for FY06: This option assumes that the entire project cost of $12 million is incurred within FY05. However, since the project duration is 12 months, it extends into FY06. Therefore, this option does not account for the costs incurred in FY06 and is not appropriate.
3. $12 million for FY04 and $0 million for FY05: This option assumes that the project starts a year earlier in FY04, but the question states that the project is scheduled to start in July 2005. Therefore, this option does not align with the project timeline and is not appropriate.
4. $3 million for FY04 and $9 million for FY05: This option assumes that the project starts in FY04, but as mentioned earlier, the project is scheduled to start in July 2005. Therefore, this option also does not align with the project timeline and is not appropriate.
From our analysis, the two appropriate budget requests for this project are:
- $3 million for FY05 and $9 million for FY06.