If a Contract Modification Does Not Create a Separate Contract

question 64

Multiple Choice

If a contract modification does not create a separate contract, it is accounted for using

• A) either a cumulative catch-up adjustment or a retrospective approach.
• B) either a cumulative catch-up adjustment or a prospective approach.
• C) either a retrospective approach or a prospective approach.
• D) either a cumulative catch-up adjustment, a prospective approach, or a retrospective approach.

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Definitions:

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs.

Dominant Strategy

In game theory, a strategy that is best for a player regardless of the strategies chosen by other players.

Individual Profits

The net gain in monetary terms realized by an individual or a single business entity from its investment or business operations.

Nash Equilibrium

A concept in game theory where no player can benefit by changing strategies if the strategies of the other players remain unchanged.