In a(n) _____ contract, the buyer pays the supplier for allowable performance costs along with a predetermined fee and an incentive bonus.Group of answer choicesFirm-fixed price (FFP)Cost plus percentage of costs (CPPC)Fixed-price incentive fee (FPIF)Cost plus incentive fee (CPIF)

_____ contracts involve payment to the supplier for direct and indirect actual costs and often include fees.Group of answer choicesCost-reimbursableFixed-price incentive feeLump sumFirm-fixed-price

From the buyer’s perspective, the _____ is the least desirable among all contracts because the supplier has no incentive to decrease costs.Group of answer choicesCost plus award fee (CPAF)Cost plus incentive fee (CPIF)Cost plus percentage of costs (CPPC)Cost plus fixed fee (CPFF)

In a principal/agent relationship for contracts with customers, the pre-determined fee or commission for services is earned by the:Group of answer choices

For make-or-buy decisions, relevant costs include:Group of answer choicesdifferential costs plus fixed costsincremental costs plus differential costsincremental costs plus sunk costsincremental costs plus opportunity costs

In the presence of asymmetric information, the only contract that results in production efficiency and no moral hazard is the one in whichGroup of answer choicesthe agent receives a fixed fee.the principal receives a fixed rent.profit is shared.revenue is shared.