CPCM

CPCM practice questions, page 5 of 6, with answer review and explanations.

Question 21

A fixed fee that the seller will earn no matter how its performance is evaluated in known as:

  1. incurred fee
  2. award fee
  3. period fee
  4. base fee

Question 22

Which contracts allow overrun or under-run sharing of cost through a predetermined formula for fee adjustments that apply to incentives for cost category contracts?

  1. fixed price incentive
  2. cost-plus-incentive fee
  3. special incentive fee
  4. pros and cons of award fee

Question 23

Which of the following is Correct?

  1. cost-plus-award fee contracts include subjective incentives, in which the profit the seller earns depends on how well the seller satisfies a buyers subjective desires.
  2. cost-plus-incentive fee contracts include subjective incentives, in which the profit the seller earns depends on how well the seller satisfies a buyers objective desires.
  3. cost-plus-award fee contracts include objective incentives, in which the profit the buyer earns depends on how well the seller satisfies a buyers objective desires.
  4. cost-plus-incentive fee contracts include objective incentives, in which the profit the buyer earns depends on how well the buyer satisfies a sellers subjective desires.

Question 24

Time and Material contracts typically involve higher levels of risks for sellers.

  1. True
  2. False

Question 25

When two parties expect except to deal with one another repeatedly for the purchase and sale of good and services, they may decide to enter into a long-term purchase agreement.

  1. True
  2. False