Which of the Following Type of Business Is Most Likely

question 316

Multiple Choice

Which of the following type of business is most likely to use cost-plus-percentage-of-cost pricing?

• A)real estate agency
• B)insurance company
• C)power company
• D)space shuttle contractor
• E)architect

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Definitions:

Agency Relationship

A legal and fiduciary relationship between two parties, where one (the agent) is authorized to act on behalf of the other (the principal) in business transactions.

Illegal

Activities or practices that are forbidden by law and subject to penalties if violated.

Agency Agreement

A contract in which one party (the agent) agrees to act on behalf of another party (the principal) in particular transactions.

Binding

Refers to an agreement or contract that is legally enforceable by law.