Home » PMI » PMP » When writing payment terms in your fixed-price subcontracts it is especially important to A. Include incentives if the seller exceeds or fails below defined objectives
When writing payment terms in your fixed-price subcontracts it is especially important to A. Include incentives if the seller exceeds or fails below defined objectives
B. Provide flexibility to redirect the seller if the scope of work is not defined precisely confusion
C. Link progress made to compensation paid
D. Associate the payment to a specific time period for more efficient accounting
Correct Answer: C
Explanation/Reference:
Explanation:
A buyer under a fixed-price contract should pay a seller for work delivered rather than time expended. Linking payment with progress ensures that the seller will focus on results and not on effort expended.
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