Question

Teatro Restoration, Inc., begins renovating an old theater for Urban Edge Productions, but after three months Teatro demands an extra $250,000. Urban Edge agrees to pay. Refer to Fact Pattern 13–4. ​If Teatro says it is asking for the extra $250,000 because ordinary business expenses have increased, the agreement is:

Answer 1

Answer: Cost plus contract

Explanation:

A contract in which the contractor is reimbursed on allowable expenses and paid an agreed percentage of the total allowable expenses.