Many Government Agency Contracts Exclude All but Which of the Following

question 126

Multiple Choice

Many government agency contracts exclude all but which of the following costs from reimbursement under cost-plus agreements?

• A) marketing costs
• B) design costs
• C) production costs
• D) part of the research and development costs

---

Definitions:

Real Option

A real option is a financial concept that represents the choice to undertake certain business initiatives, such as expanding, deferring, or abandoning a project, based on future opportunities.

Expected NPV

The anticipated Net Present Value of an investment, calculated using expected cash flows and discounting them to their present value.

Project's Risk

The potential for losses or less-than-expected returns from a specific investment or business project.

Risk

The potential for losing something of value, often measured by the variability of returns associated with an investment.