Management Concepts
A company has $50,000 in equipment, $20,000 in cash, and $30,000 in accounts payable. How much working capital does it have? A. ($10,000) B. $10,000 C. $20,000 D. $40,000
A. ($10,000) Working Capital=Current Assets - Current Liabilities
A company has $10,000 in cash, $20,000 in equipment, and $20,000 in accounts payable. The tax rate is 13%. What is the current ratio? A. 0.5 B. 0.67 C. 1.3 D. 1.5
A. 0.5 Current Ration = Current Assets/Current Liabilities Current Assets = Cash, accounts receivable, inventory, cost in excess, and prepaid expenses.
A city electrical inspector makes the following statement after discovering that the new condominium building # 13 of 25 buildings has been drywalled without an electrical inspection. The inspector says to you, the superintendent, "Gee"! It will be pretty expensive to remove all of the drywall. I'd bet it will cost you at least $5, 000. I'd like to have that kind of money myself! (You suspect that the inspector is asking for a bribe). A. Contact the building department supervisor and ask to have hidden areas removed B. Instruct your workers to remove all of the drywall for the electrical inspection. C. Pay the inspector because you don't want to be bothered with the situation. D. Contact the City Commissioners and the local newspaper and have the inspector relieved of his duties.
A. Contact the building department supervisor and ask to have hidden areas removed
What are the quality standards used internationally called? A. ISO 9000. B. Statistical Process Control. C. Total Quality Management. D. Baldrige Award of Excellence.
A. ISO 9000.
At which point in time must the Agreement be provided to each prospective bidder? A. At the bid opening. B. During the bidding phase of the project. C. At the signing of the Owner- Contractor Agreement. D. Just before the signing of the Owner- Contractor Agreement.
B. During the bidding phase of the project.
What is the name of the clause that is sometimes used if the contract has the potential of an uncertainty in either labor or material prices? A. Incentive. B. Escalation. C. Contingency. D. Equitable Adjustment.
B. Escalation.
What graphical measurement tool is a pictorial representation of a process? A. Run Chart. B. Flow Chart. C. Control Chart. D. Scatter Diagram.
B. Flow Chart.
A contract is entered into whereby two Contractors agree to combine their resources to bid and build a specific project. What is this type of contract called? A. Cost Plus. B. Joint Venture. C. Design-Build. D. Construction Management.
B. Joint Venture.
After a $15,000,000 bid on a new pump house. You are publicly regarded as the apparent second low bidder. The following day one of the subcontractors for a $4,500,000 portion of the project calls and asks how he compared with his competitors. He is the low bidder with you. What do you tell the subcontractor? A. Divulge all and hope to put your competitor at a negotiating disadvantage. B. Maintain your silence in respect for the other subcontractors who provided quotes. C. Provide the subcontractor a ball park idea where they stood, but don't be specific. D. Tell him that it is none of his business and hang up on him for bothering you.
B. Maintain your silence in respect for the other subcontractors who provided quotes.
Which document establishes the reference date from which the beginning of the project is calculated and that the contractor can occupy the site? A. Notice of Award. B. Notice to Proceed. C. Instructions to Bidders. D. Advertisement to Bidders.
B. Notice to Proceed.
What graphical display tool contain line graphs that show a trend over time such as the workhours per square yard of asphalt over a period of time? A. Bar Chart B. Run Chart. C. Flow Chart. D. Control Chart.
B. Run Chart
Which law are corporations formed under? A. City. B. State. C. Federal. D. Municipal.
B. State.
According to the Constructor's Code of Ethics, The Constructor shall not maliciously or recklessly injure or attempt to injure the professional reputation of others. You have just been notified in writing that you have not met the minimum score required to pass the Level 2 Advanced Construction Applications Examinations even though you have over twenty years of experience. What is the Best way to proceed? A. Call the Commission office and criticize the poor quality of the examination. B. Submit a written request to the Commission, postmarked no later than thirty days after the notice of failure according to the Appeals Process procedures. C. Obtain the e-mail addresses of all members and send a letter criticizing the quality of the test questions and that certain portions of the examination were wrong. D. Call the Commission office and ask for hints on how close you were to passing and what questions should be appealed. Then provide a solid grounds for appeal.
B. Submit a written request to the Commission, postmarked no later than thirty days after the notice of failure according to the Appeals Process procedures.
A contract has been entered into whereby the Contractor agrees to design, build, purchase the land and finance the project. What is this type of contract called? A. Cost Plus. B. Turn Key. C. Partnering. D. Design-Build.
B. Turn Key.
Which legal entity is considered perpetual? A. partnership B. corporation C. joint venture D. sole proprietorship
B. corporation
Which delivery method has the most risk for the contractor? A. design-bid-build B. design-build C. CM at risk D. integrated project delivery
B. design-build
At which point in time must the ownercontractor agreement be provided to each prospective subcontractor bidder? A. at the bid opening B. during the bidding phase of the project C. at the signing of the owner-contractor agreement D. before the signing of the ownercontractor agreement
B. during the bidding phase of the project
Which of the following should a construction professional provide when delivering services to his or her clients based on the AIC code of ethics? A. adjustable ethics based on clients' preferences B. management excellence C. minimum industry standards D. complete transparency to everyone on every task
B. management excellence
Under which municipal law are corporations formed? A. city B. state C. federal D. municipal
B. state
Which of the following contract types is best used if the scope is well defined but not the quantities of material? A. lump sum B. unit price C. cost plus D. cost plus with GMP
B. unit price
Purchase Price = $100,000 Salvage Value = $ 10,000 Service Life = 3 Years. What is the depreciation amount at the end of year one using the Sum-of-the-Year-Digits method? A. $15,000 B. $16,667 C. $45,000 D. $50,000
C. $45,000 Sum of the Year = years sum "(3+2+1)" = 6 for denominator year 1 = (3 year left/6)*(100,000-10,000)
Purchase Price = $100,000 Salvage Value = $ 10,000 Service Life = 3 Years. What is the depreciation amount at the end of year one using the Double Declining Method? A. $30,000 B. $45,000 C. $66,667 D. $90,000
C. $66,667 Declining or Double declining = (2*Remaining book value)/service life
Using the financial statements provided in Figures 3a and 3b, what is the quick ratio (acid test)? A. 0.23 B. 0.48 C. 1.00 D. 2.07 Cash and Equiv = 260,631 Accounts Receivable = 423,731 Current Liabilities = 682,661
C. 1.00
Using the financial statements provided in Figures 3a and 3b, what is the current ratio? A. 0.47 B. 1.00 C. 2.07 D. 4.36 Current Assets = 1,415,815 Current Liabilities = 682,661
C. 2.07 Ration = Current Assets/Current Liabilities
What is the return on assets assuming a net profit before tax of $15,000 and $30,000 total assets? A. 0.5% B. 2% C. 50% D. 200%
C. 50% ROA= (Net Profit before tax/Total Assets)*100
What are the two FEE methods that an Agency CM firm may offer an Owner? A. Incentive or Target. B. Unit Price or Alternate Prices. C. Fixed Price or Guaranteed Maximum Price. D. Cost-Plus a Percentage or Cost Plus Fixed Price.
C. Fixed Price or Guaranteed Maximum Price.
What is the name of the criteria that is utilized to improve an organization and evaluate their progress toward becoming the best in their field? A. Total Safety Management. B. Statistical Process Control. C. Total Quality Management. D. Baldrige Award of Excellence.
D. Baldrige Award of Excellence.
Which of the following Safety criteria that has the greatest potential for reducing the costs of accidents? A. Experience. B. Safety Meetings. C. Traditional Safety Program. D. Behavior-based Safety Process.
D. Behavior-based Safety Process.
According to the Constructor's Code of Ethics, The Constructor shall insure that when providing a service or advice such advice shall be to treat all parties in a fair and unbiased way. What is the best way for a Constructor to achieve this? A. Fire someone for being considered unethical. B. Review your mission and goal statement on ethical behavior. C. Follow the guidelines provided in your employment contract. D. Don't engage in any practice which creates an unfair advantage for one party.
D. Don't engage in any practice which creates an unfair advantage for one party.
Purchase Price = $100,000 Salvage Value = $ 10,000 Service Life = 3 Years. What is the depreciation amount at the end of year one using the Straight line method? A. $30,000 B. $33,333 C. $45,000 D. $90,000
A. $30,000 Straight Line = (Purchase Price - Salvage Value)/Service Life
Which of the following contract formation principles are needed to form a valid contract? A. Offer, Acceptance, Meeting of the Minds and Consideration. B. Performance, Technical Specifications and Consideration. C. General Conditions, Supplementary Conditions and a Proposal. D. Plans, Technical Specifications, General and Supplementary Conditions.
A. Offer, Acceptance, Meeting of the Minds and Consideration.
What management concept has as its primary goal to get commitment from top management of all project participants and stakeholders to develop open communications and cooperation on a project to? A. Partnering. B. Total Safety Management. C. Statistical Process Control. D. Total Quality Management.
A. Partnering.
Which legal entity exposes the personal assets of a person to pay for actions of other people involved in the business? A. Partnership. B. Corporation. C. Joint Venture. D. Sole Proprietorship.
A. Partnership.
Which is an advantage of forming a corporation? A. Shareholders have reduced personal liability. B. The corporation's value can't go down from its initial purchase price. C. Less taxes are paid than in a limited liability corporation. D. Quick decision making is possible, especially for large companies.
A. Shareholders have reduced personal liability.
What management philosophy is defined as a performance and processed-oriented approach to safety and health that is improved continually and applies proven principles to maximize an organization's long-term competitiveness? A. Total Safety Management. B. Statistical Process Control. C. Total Quality Management. D. Baldrige Award of Excellence.
A. Total Safety Management.
A contract is entered into in which the design and scope are undefined and the owner agrees to pay for all direct labor, materials, and equipment, plus an agreed upon fee to the contractor for their services. What is this type of contract called? A. cost plus B. turnkey C. unit price D. lump sum
A. cost plus
Which of the following contract types is generally considered to have the most risk for the contractor? A. lump sum B. unit price C. cost plus D. cost plus with GMP
A. lump sum
Under which legal structure are the least total taxes paid for the goods and services provided by the company? A. sole proprietorship B. federalist C. corporation D. joint venture
A. sole proprietorship
Using the financial statements provided in Figures 3a and 3b, what is the working capital for this company at the end of the year? A. $176,177 B. $733,154 C. $1,463,403 D. $1,633,389 Current Assets = 1,415,815 Current Liabilities = 682,661
B. $733,154 working capital = Current Assets - Current Liabilities
In which delivery method is the construction administrator most like a consultant? A. lump sum B. CM agency C. CM at risk D. integrated project deliver
B. CM agency
Contractor "A" was low bidder on a general-contacted project which has an extensive number of alternative during bidding and negotiations. Contractor "A" received a standard contract from Mary, the lead Architect, a source of business for several years, Ed the Estimator at Contractor "A", discovers the contract value was erroneously issued at $365,000 instead of the $355,000. How should Ed handle this situation? A. Ignore the error and sign the contract. B. Call Mary, the lead architect, and inform her of your discovery. C. Inform Mary, the lead architect, of the error but encourage them to leave the difference in the contract as a contingency. D. Inform Mary, the lead, architect of the error and tell them to leave the amount in the contract to cover the potential errors in the numerous alternatives
B. Call Mary, the lead architect, and inform her of your discovery.
Which legal entity is taxed twice? A. Partnership. B. Corporation. C. Sole Proprietorship. D. Subchapter S Corporation
B. Corporation.
Which type of legal entity requires a charter? A. Partnership. B. Corporation. C. Joint Venture. D. Sole Proprietorship.
B. Corporation.
Constructor "Z" is building an addition to an existing pharmaceutical plant of approximately 20,000 square feet. There is space on the site for one more future addition. After installing foundations, Ed, the Constructors Superintendent, is verifying the dimensions with Jim the Bricklayer crew leader and they discover that the addition has been laid out 1' - 0" out of square. All work can still be performed with very minor field adjustments. The error will compound itself if the future addition ever takes place. Ed has worked on Mary the Architect's, projects for over twenty years but never for this owner. What should Ed do? A. Ignore the error and tell no one. B. Inform Mary, the architect only. C. Inform the Owner and Mary the Architect. D. Have Ed, the superintendent, and Jim, the Bricklayer adjust as required.
C. Inform the Owner and Mary the Architect.
Which management system was developed based on Toyota's Production System? A. TQM B. Six Sigma C. Lean D. ISO 9000
C. Lean
Which legal entity makes it extremely difficult to generate new capital to expand the business? A. Partnership. B. Corporation. C. Sole Proprietorship. D. Subchapter S Corporation.
C. Sole Proprietorship.
Which statement is true about the designbuild delivery method from the owner's perspective? A. Design is complete when contractor is hired. B. Fast tracking is difficult with this delivery method. C. There is a single source of fault for building system failures. D. Design Build firms are rarely temporary joint ventures.
C. There is a single source of fault for building system failures.
What management philosophy tries to maximize the competitiveness of an organization through continuous improvement? A. Partnering. B. Statistical Process Control. C. Total Quality Management. D. Baldrige Award of Excellence.
C. Total Quality Management.
A contract is entered into whereby the Design, Scope and Bid quantities are established and payment for the work is to be made upon the basis of the actual quantity placed. What is this type of contract called? A. Cost Plus. B. Turn Key. C. Unit Price. D. Fixed Price.
C. Unit Price.
Which chart would be the most appropriate to show the percentage of fall protection safety violations compared to all safety violations? A. histogram B. bar chart C. pie chart D. line chart
C. pie chart
Which graphical measurement tool is a bar chart that displays a frequency distribution? A. histogram B. Pareto chart C. pie chart D. fishbone chart
C. pie chart
Which of the following principles of law states that if the prime contractor reasonably relies on the promise or price of the subcontractor to its detriment, then the subcontractor must be held to its promise to avoid harm to the prime contractor even though a signed contract between the contractor and subcontractor does not exist at the bidding phase of a project? A. consideration B. legal purpose C. promissory estoppel D. equitable adjustment
C. promissory estoppel
Purchase Price = $100,000 Salvage Value = $ 10,000 Service Life = 3 Years. What is the remaining book value amount at the beginning of year two using the Sum-ofthe-Year-Digits method? A. $10,000 B. $45,000 C. $50,000 D. $55,000
D. $55,000 Remaining Book Value EOY 1 = 100,000-45,000 = 55,000 = Beginning Year 2
Which of the following is a management system used to improve customer satisfaction? A. TQM B. Six Sigma C. Lean D. All the above
D. All the above
What makes TQM and TSM successful? A. Applying the partnering process to an organization. B. Applying the TQM and TSM principles to an organization. C. Adding more Quality Control and Safety Managers to oversee the workers. D. Eliminating the isolation problem and making quality and safety everybody's role.
D. Eliminating the isolation problem and making quality and safety everybody's role.
What graphical measurement tool displays the causes and effects on a diagram for analyzing problems? A. Histogram. B. Pareto Chart. C. Control Chart. D. Fishbone Chart.
D. Fishbone Chart.
You as a Masonry Subcontractor recently submitted a bid of $450,000 to a General Contractor for the masonry portion of a new office building. You are invited to the General Contractor's office to discuss the project. In the midst of negotiations, the General Contractors representative is called out of the room. In his absence, you notice the spread sheet listing all the bids received including yours. It is apparent from the spread sheet that you are $22,000 higher than the low bidder. The next highest bidder is $8,000 above you. What action should you take? A. Lower your price by $25,000 upon the General Contractor's return, giving the reason that you had a chance to re-examine your numbers. B. Be concerned that the spread sheet may be a decoy with the intention of getting you to lower your price enough to become the lowest bidder. C. Continue negotiating with the General Contractor over price upon the General Contractor's return to the meeting. Always knowing you have the upper hand. D. Maintain your original price quotation, extol the virtues of your company to be able to meet the schedule, the high quality of your work and your relationship.
D. Maintain your original price quotation, extol the virtues of your company to be able to meet the schedule, the high quality of your work and your relationship.
What graphical measurement tool is a bar graph of identified causes shown in descending order of magnitude? A. Bar Chart B. Histogram. C. Gantt Chart. D. Pareto Chart.
D. Pareto Chart
What graphical measurement tool is a graph displaying the correlation of two characteristics? A. Run Chart. B. Flow Chart. C. Control Chart. D. Scatter Diagram.
D. Scatter Diagram.
Which type of legal entity allows the income and deductions of the corporation to flow through to the individual tax returns of the shareholders and it avoids federal taxes? A. Partnership. B. Corporation. C. Sole Proprietorship. D. Subchapter S Corporation
D. Subchapter S Corporation
The owner requests that you submit a proposal supplement titled, "Statement of Contractors' Qualifications - All Contracts" and under the officers/principals section it requests the names and titles of the vice president and the president. A proposal is submitted to the Owner with a bid bond, signed addenda, and the proposal form is attached and signed by the chief estimator. Have all of the contract formation principles been satisfied and your proposal would be considered responsive? A. The principle of Consideration has been met, therefore, responsive bid. B. The principle of Legal Capacity has been met, therefore, responsive bid. C. The principle of the meeting of the minds has been met, therefore, responsive bid. D. The principle of Legal Capacity has not been met, therefore, a non-responsive bid.
D. The principle of Legal Capacity has not been met, therefore, a non-responsive bid. means they must have the legal authority to sign the proposal being submitted
Which law establishes basic rules governing the sale of goods used to establish a purchase order? A. Davis Bacon Act B. Uniform Commercial Code C. National Labor Relations Act D. Uniform Transportation Code
D. Uniform Transportation Code
Which of the following is a major difference between a CM agency and a CM at risk? A. manages construction on the owner's behalf B. has a contract with the designer C. provides a lump sum price for construction services D. caps the construction costs the owner is required to pay
D. caps the construction costs the owner is required to pay
A contract is entered into in which the owner holds a contract with the architect and each trade contractor. In addition, the owner holds a contract with a management service company to perform the trade coordination, cost control, and scheduling services. What is this project delivery method called? A. partnering B. joint venture C. design-build D. construction management
D. construction management
The owner wants to fast-track a construction project. Which project delivery system best supports this process? A. partnering B. design-bid-build C. CM agency D. design-build
D. design-build
In the construction industry, which legal entity is often a temporary arrangement? A. sole proprietorship B. partnership C. limited liability corporation D. joint venture
D. joint venture
Which of the following is a fundamental element of a contract? A. exchange of money B. revised scope of work C. time extension D. mutual acceptance
D. mutual acceptance