On a commercial project involving a sprawling site for which the scope of services to be provided is not precise and cannot be immediately defined, which of the following compensation methods would be LEAST advantageous for an architecture firm?
A. Fixed fee
B. Hourly billing rates & fee multipliers
C. Cost plus fixed fee
D. Unit cost methods
AnswerA. Fixed fee is least advantageous and least profitable as the firm cannot accurately relate fee to scope. Hourly billing, cost plus fee and unit cost methods are by varying degrees more equitable for this situation.
ARE 4.0 exam prep: CDS
A. Fixed fee
B. Hourly billing rates & fee multipliers
C. Cost plus fixed fee
D. Unit cost methods
AnswerA. Fixed fee is least advantageous and least profitable as the firm cannot accurately relate fee to scope. Hourly billing, cost plus fee and unit cost methods are by varying degrees more equitable for this situation.
ARE 4.0 exam prep: CDS
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