If the Scope Seems Much Less Than Originally Anticipated by the Customer

question 83

True/False

If the scope seems much less than originally anticipated by the customer, the customer and contractor would have to agree on increasing the budget, extending the schedule, reducing the scope, or some combination thereof.

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Definitions:

Explicit Cost

The monetary payment made by a firm to an outsider to obtain a resource.

Accounting Profits

The net income a company has after subtracting all costs and expenses from total revenue, as recognized in financial statements.

Opportunity Cost

The value of the next best alternative that is foregone as a result of making a particular decision.

Accounting Profits

The total revenues of a business minus the explicit costs, essentially the net income on the financial statements.