1. Read the following scenario and answer the question in 5-10 sentences. You ar
ID: 363655 • Letter: 1
Question
1. Read the following scenario and answer the question in 5-10 sentences. You are a manager employed by a construction company that builds small venues for rock concerts, sporting events, and other activities. RP Properties is negotiating an agreement with your company to build a $100 million stadium near a city downtown. Among many other terms, the contract states that the project should be completed by January 1 of next year. The contract also states that your company will be obligated to pay $20,000 for each day of delay in completion after January 1. Although you know the contract will be profitable for your company, evaluate the risks of accepting such a contract given the contract clause.
1. Read the following scenario and answer the question in 5-10 sentences. You are a manager employed by a construction company that builds small venues for rock concerts, sporting events, and other activities. RP Properties is negotiating an agreement with your company to build a $100 million stadium near a city downtown. Among many other terms, the contract states that the project should be completed by January 1 of next year. The contract also states that your company will be obligated to pay $20,000 for each day of delay in completion after January 1. Although you know the contract will be profitable for your company, evaluate the risks of accepting such a contract given the contract clause.
1. Read the following scenario and answer the question in 5-10 sentences. You are a manager employed by a construction company that builds small venues for rock concerts, sporting events, and other activities. RP Properties is negotiating an agreement with your company to build a $100 million stadium near a city downtown. Among many other terms, the contract states that the project should be completed by January 1 of next year. The contract also states that your company will be obligated to pay $20,000 for each day of delay in completion after January 1. Although you know the contract will be profitable for your company, evaluate the risks of accepting such a contract given the contract clause.
Explanation / Answer
The risks of accepting such contracts are very high. The risk of evaluating such contract are as follows:
1. Delivery of project on time risk
2. Labour cost
3. The cost of capital needed to start a project.
4, failue of the machinery / construction equipment.
These are the risks associated with it.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.