_____ Is a Contract Type That Provides an Incentive for Performing

question 1

Multiple Choice

_____ is a contract type that provides an incentive for performing on the project above the established baseline in the contract.

• A) Cost reimbursable contract with a percentage fee
• B) Cost reimbursable contract with a fixed fee
• C) Fixed price with incentive fee contract
• D) Fixed price with price adjustment contract
• E) Cost reimbursable contract with an incentive fee

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Definitions:

Variable Costs

Expenses that change in proportion to the production output or sales amount.

Target Costing

A pricing strategy in which the selling price of a product is set first, and then the target cost is determined by subtracting a desired profit margin from the selling price.

Return on Investment

A performance measure used to evaluate the efficiency or profitability of an investment, calculated as net income divided by the cost of the investment.

Selling Price

The price at which a product or service is offered to customers, often determined by costs, market demand, and competition.