Asked by Jalyn Lankford on Jun 17, 2024
Verified
A _____ is a contract that reimburses the contractor for costs but the profit is a fixed amount.
A) cost reimbursable contract with a percentage fee
B) fixed price with an incentive fee
C) fixed total cost
D) fixed price with price adjustment
E) cost reimbursable contract with a fixed fee
Fixed Fee
A pricing structure where the cost of a service or project is agreed upon upfront and not subject to change based on time or resources used.
Cost Reimbursable Contract
A type of contract where the buyer reimburses the seller for all legitimate costs incurred plus a fee representing profit.
Profit
The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes involved in maintaining the business.
- Understand the different forms of contracts utilized in projects and their effects on project management.
Verified Answer
DN
Darren NocettiJun 19, 2024
Final Answer :
E
Explanation :
A cost reimbursable contract with a fixed fee reimburses the contractor for their costs incurred, but the profit is a fixed amount agreed upon at the start of the contract. This incentivizes the contractor to keep costs low while still ensuring they make a profit.
Learning Objectives
- Understand the different forms of contracts utilized in projects and their effects on project management.