The price the government pays for standard weapons purchased : GMAT Critical Reasoning (CR)
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# The price the government pays for standard weapons purchased

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Manager
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The price the government pays for standard weapons purchased [#permalink]

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03 Apr 2007, 18:42
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The price the government pays for standard weapons purchased from military contractors is determined by a pricing method called â€œhistorical costing.â€
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03 Apr 2007, 18:52
Ans:A.

Since historical pricing adds on to the previous year's contractual price, the governement will pay if there was an inefficient use of funds in the past - i.e. if inefficient use led to higher contractual price paid out previously, then historical pricing applied today will include that amount of improperly managed fund paid out.
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03 Apr 2007, 20:06
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03 Apr 2007, 20:16

ywilfred.... The explanation is apt.
03 Apr 2007, 20:16
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