CAPM (Certified Associate in Project Management) Practice Exam

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Prepare for the CAPM (Certified Associate in Project Management) exam with our informative quiz. Test your knowledge through multiple-choice questions and detailed explanations to boost your confidence and readiness for the certification.

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What is generally used for small dollar amounts and may be priced on a per hour or per item basis?

Time and material contracts
Fixed price contracts
Cost reimbursable contracts
Letter contracts

The correct answer is: Time and material contracts

Time and material contracts are commonly used for small dollar amounts because they offer greater flexibility in pricing. This type of contract allows for contractors to be paid based on the time and materials they use, rather than a predetermined fixed price. This is beneficial for small dollar amounts as it allows for more precise pricing and avoids overcharging for a set price. Fixed price contracts, on the other hand, may be better suited for larger amounts as they have a set price that may not accurately reflect the actual time and materials used. Cost reimbursable contracts, while also offering flexibility, may be more suitable for larger and more complex projects. Letter contracts, in contrast, are used as a temporary measure until a more detailed contract can be negotiated and are not commonly used for small dollar amounts.