IBM C1000-100

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IBM Cloud Solution Architect v4

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Which of the following contracts has the MOST risk for the buyer?
A. Fixed price (FP)
B. Cost plus percentage of costs (CPPC)
C. Cost plus fixed fee (CPFF)
D. Time and Materials (T&M)
Answer: B
Cost-plus contracts are ones where the seller bills the buyer for any costs incurred on the project. A "Cost plus percentage of costs" (CPPC) contract is one where the seller agrees to pay a percentage of the total costs of the project. This is the riskiest kind of contract for the buyer, because if the costs get really high then they're passed along to the buyer - and the seller doesn't have any incentive to keep them down!

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