Contractor a Is Negotiating to Build a Warehouse for Firm

question 41

Multiple Choice

Contractor A is negotiating to build a warehouse for Firm B to be completed in 75 days. Contractor A's estimated cost is $200,000. Pushing back the completion date by 15 days would allow it to reduce its cost by $30,000. The value to Firm B of the warehouse is $250,000 if completed in 75 days and $235,000 if completed in 90 days. A mutually beneficial, efficient deal:

• A) means completion of the warehouse construction in 90 days at a price greater than $235,000.
• B) means completion of the warehouse construction in 90 days at a price between $170,000 and $235,000.
• C) is not possible as there is no zone of agreement.
• D) means completion of the warehouse construction in 75 days at a price between $200,000 and $250,000.
• E) is possible only if contractor A agrees to build the warehouse in 75 days.

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Dental Plans

Insurance coverage plans that help pay for the costs of dental care.

Employee Benefits

Various types of non-wage compensation provided to employees in addition to their normal wages or salaries, such as health insurance, pension plans, and paid vacations.

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The expenses related to the provision of health services, including diagnosis, treatments, surgery, medication, and support services.

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Offerings or donations given by individuals or entities, typically for charitable purposes or to support a cause.