Financial Analysis & Valuation Flashcards
7 cards from real FAC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Analysis & Valuation flashcards as text
A contractor submitting cost or pricing data under TINA must certify that the data is:
Answer: Accurate, complete, and current as of the date of agreement on price
TINA certification requires the contractor to attest that submitted cost or pricing data is accurate, complete, and current as of the date final price agreement is reached.
Which of the following is an example of a semi-variable (mixed) cost?
Answer: A utility bill with a fixed monthly charge plus a per-unit usage fee
Semi-variable costs have both a fixed component (base charge) and a variable component (usage fee) that changes with activity level.
The Statement of Work (SOW) is critical to cost analysis because:
Answer: It defines the scope that determines what costs are necessary and allocable to the contract
The SOW defines exactly what work must be performed, which is the foundation for determining which costs are necessary and properly allocable to the contract.
Under FAR 31.205-6, which form of compensation is generally UNALLOWABLE?
Answer: Severance pay for executives exceeding the normal company policy amount
Severance pay is allowable only to the extent it is paid pursuant to established company policy; amounts exceeding normal policy are unallowable.
A 'should-cost' review team typically includes which type of specialists?
Answer: Government cost analysts, engineers, price analysts, and auditors
Should-cost teams are multidisciplinary, combining cost/price analysts, engineers who understand technical performance, and auditors to assess all cost elements.
In the context of contract financing, progress payments are calculated based on:
Answer: A percentage of total costs incurred by the contractor to date
FAR 32.5 provides for customary progress payments as a percentage (typically 80% for large businesses, 85% for small) of total costs incurred.
When analyzing a contractor's overhead rate proposal, a cost analyst should be particularly concerned if:
Answer: Costs that are unallowable under FAR Part 31 are included in the overhead pool
Including unallowable costs in the overhead pool inflates the rate and results in the government being overcharged across all contracts bearing that overhead.