Contract Incentives Are Often Used When the Buyer Wants the Seller

question 39

True/False

Contract incentives are often used when the buyer wants the seller to meet some defined project metrics,such as finishing the project early,providing a higher level of quality or more features,or anything else that the buyer wants to maximize and is willing to pay for.

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Definitions:

Revenue

The total income generated by a company from its usual business activities, usually from the sale of goods and services to customers.

Spending Variance

A financial metric that indicates the difference between the budgeted or planned amount of spending and the actual amount spent.

Flexible Budget

A budget that is adaptable and varies according to the changes in activity level or volume.

Net Operating Income

The profit generated from a company's core business operations, excluding deductions of taxes and interest.