AIC - Management

Question 1

Which of the following is a fundamental

element of a contract?

Answer 1

mutual acceptance

Question 2

Which of the following contract types is
generally considered to have the most risk
for the contractor?

Answer 2

lump sum

Question 3

Which of the following contract types is best
used if the scope is well defined but not the
quantities of material?

Answer 3

unit price

Question 4

In which delivery method is the construction

administrator most like a consultant?

Answer 4

CM agency

Question 5

Which statement is true about the designbuild
delivery method from the owner’s
perspective?

Answer 5

There is a single source of fault for

building system failures.

Question 6

Which delivery method has the most risk for

the contractor?

Answer 6

design-build

Question 7

Which of the following is a major difference

between a CM agency and a CM at risk?

Answer 7

caps the construction costs the owner is

required to pay

Question 8

Under which legal structure are the least
total taxes paid for the goods and services
provided by the company?

Answer 8

sole proprietorship

Question 9

In the construction industry, which legal entity

is often a temporary arrangement?

Answer 9

joint venture

Question 10

Which is an advantage of forming a

corporation?

Answer 10

Shareholders have reduced personal

liability.

Question 11

Current Ratio

Answer 11

Current Assets /

Current Liabilities

Question 12

Quick Ratio

Answer 12

(Cash and Equivalents + Accounts Receivable) /

Current Liabilities

Question 13

Days Receivable

Days receivable indicates the average number
of days a company takes to receive payment.

Answer 13

365/ (Revenue/Trade Receivables)

Question 14

Days Payable

Days payable indicates the average number
of days a company takes to make payments

Answer 14

365 / (Direct Cost/Accounts Payable)

Question 15

Working Capital

Working capital measures available funds for
investment in operations to generate future
revenue and profit.

Answer 15

Current Assets – Current Liabilities

Question 16

Fixed/Worth

Fixed/worth is the ratio that measures the
amount in which the owner’s equity is invested in
fixed assets

Answer 16

Net Fixed Assets /

Tangible Net Worth

Question 17

Debt/Worth

Debt/worth is the ratio of capital contributed
by creditors and the capital contributed by the
owners.

Answer 17

Total Liabilities /

Tangible Net Worth

Question 18

Return on Investment (ROI)

ROI measures the effectiveness and rate of
return on invested capital.

Answer 18

Net Profit before Taxes /Tangible Net Worth × 100

Question 19

Return on Assets (ROA)

ROA measures the effectiveness of asset
utilization.

Answer 19

Net Profit before Taxes / Total Assets × 100

Question 20

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?

Answer 20

$10,000/$20,000 = 0.5

Question 21

What is the return on assets assuming a net
profit before tax of $15,000 and $30,000
total assets?

Answer 21

$15,000 / $30,000 x 100 = 50%

Question 22

A company has $50,000 in equipment,
$20,000 in cash, and $30,000 in accounts
payable. How much working capital does it
have?

Answer 22

$20,000 - $30,000 = ($10,000)

Question 23

Which chart would be the most appropriate
to show the percentage of fall protection
safety violations compared to all safety
violations?

Answer 23

pie chart

Question 24

Which of the following is a management
system used to improve customer
satisfaction?

Answer 24

All the above - TQM (Total Quality Management)/ Six Sigma/ Lean

Question 25

Which management system was developed

based on Toyota’s Production System?

Answer 25

Lean

Question 26

Which of the following should a construction
professional provide when delivering
services to his or her clients based on the AIC
code of ethics?

Answer 26

management excellence