PK0-005 Project Life Cycle Practice Question
A vendor is hired to provide a service with a fixed price of $100,000, regardless of actual costs incurred. Which contract type is this?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Fixed-price
A fixed-price contract has a predetermined price that does not change based on the seller's cost performance.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Fixed-price
Why this is correct
Correct: fixed-price has a set price.
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Time and Materials (T&M)
Why it's wrong here
T&M pays for time and materials used.
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Cost-reimbursable
Why it's wrong here
Cost-reimbursable pays actual costs plus fee.
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Cost-plus
Why it's wrong here
Cost-plus is a type of cost-reimbursable.
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