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.

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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Which type of contract involves payment to the seller for all legitimate actual costs incurred for the work plus a fee representing seller profit?

Fixed-price contracts
Cost-reimbursable contracts
Time and materials contracts
Unit price contracts

The correct answer is: Cost-reimbursable contracts

Cost-reimbursable contracts involve the seller being reimbursed for all legitimate costs incurred during the project, as well as receiving a fee for profit. This type of contract is typically used when the scope of work is uncertain or when the buyer wants more control over the project. Option A, fixed-price contracts, would not involve reimbursement of costs and instead would have a fixed price for the entire project. Option C, time and materials contracts, also do not involve a fee for profit for the seller and instead have a set hourly rate for labor and materials. Option D, unit price contracts, would involve a fixed price per unit of work, rather than reimbursing for actual costs.