Which Is True of Lump-Sum Contracts

question 22

Multiple Choice

 Which is true of lump-sum contracts?

• A) They incur a high degree of risk for the buyer.
• B) They involve a fixed total price for a well-defined product or service.
• C) They consist of a fee based on the satisfaction of subjective performance criteria.
• D) They are also known as cost-reimbursable contracts.

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Definitions:

Borrow

To receive something, especially money, from a person or financial institution with the agreement to return it, typically with interest, at a future date.

Gross Domestic Product (GDP)

The nation’s expenditure on all the goods and services produced in the country during the year at market prices; represented by GDP.

Economics

The social science that studies the production, distribution, and consumption of goods and services, and how individuals, businesses, and governments make choices about allocating resources.

Investment

The act of allocating resources, usually money, into assets with the expectation of generating income or profit.