Question

When business risks cannot be accurately predetermined, you negotiate:

A) Fixed-price contracts
B) Time and material contracts
C) Cost-plus contracts
D) Risk-sharing contracts

Answer 1

When business risks cannot be accurately predetermined, you negotiate risk-sharing contracts, which involve both parties sharing the risks and rewards associated with a project or business venture.

Step-by-step explanation:

When business risks cannot be accurately predetermined, you negotiate risk-sharing contracts. Risk-sharing contracts are agreements where both parties agree to share the risks and rewards associated with a project or business venture.

For example, in a risk-sharing contract, if a project ends up being more successful than anticipated, both parties share in the additional profits. Similarly, if the project incurs losses, both parties also share in the losses.