One of the Leading Causes for Failure of Systems Contracts

question 27

True/False

One of the leading causes for failure of systems contracts is that buyers get locked into price structures that do not adequately reflect changes that have occurred once the agreement is signed.

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Definitions:

Net Present Value

A financial measure that determines the net present value by subtracting the present value of cash outlays from cash inflows over a specified timeframe.

Additional Working Capital

Extra funds that a company requires to finance its day-to-day operations beyond its current working capital.

Salvage Value

The evaluated resale price of an asset after its lifespan of usefulness.

Straight-Line Method

A depreciation technique where an asset loses an equal amount of value each year over its useful life.