Final answer:
Franklin Construction has entered into a fixed-price contract, where the cost is predetermined, and does not change based on the actual costs or time taken to complete the project.
Step-by-step explanation:
If Franklin Construction entered into a fixed-price contract, they entered into a type of agreement where the payment amount does not depend on resources used or time expended. This contrasts with a cost-plus contract, where the buyer agrees to pay the cost of the work plus a fee for profit.
It also differs from a time and material contract, where the buyer agrees to pay based upon the time spent and materials used by the seller. Lastly, it is not a unit price contract, where payment is based on the unit price rates for specific components of the project. Therefore, Franklin Construction entered into a fixed-price contract, which is option 1).