1. A ....... cannot be involved in the management of the business without risking loss of mmunity from liability.

2. The term margin refers to the......... of revenue, or cost in relation to sales.

3. The purpose of a Business Plan is to provide a written summary of the Contractor's Business........and....?

4. A........ form of business organization is usually limited to a single contract or project.

5. Liquidity ratios such as..... and..... ratios, are used to measure a company's ability to meet short-term debts with cash and near-cash assets.

6 ........or...... expenses are generally those which must be paid vwithin one year or less.

7. Net worth or..... is the difference between......and....?

8. At the breakeven volume, net profit is equal to......

9. A major disadvantage of a is the potential for double taxation of........earnings to shareholders.

10. ...allow shareholders to absorb all income or losses as partners and report it as individual taxpayers, eliminating the double taxation feature of standard corporations.

11. The upper limit of .....profit is established by the market competition and the lower limit of established by company's overhead costs.

12. Gross profit expressed as a percentage of direct costs is referred to as......,
which generates the added revenue necessary to pay overheads and provide net profit.

13. The......of.....method of construction accounting recognizes revenues, expenses and estimated profits throughout the course of the project and is required by the IRS for companies having $10M or more in annual sales.

14......or ..... assets are generally not converted to cash or sold to consumers in the ordinary course of business.

15. The......method of general accounting recognizes revenues and expenses when
the company has the right to receive or render payment.

16. I f Place a (+) sign for increase in balance and (-) sign for decrease in balance for each of the account types below

Credit Debit

Assets

Liabilities

Equity

17. Within a relative range of revenue, which vary and which stay constant?

Vary Remain Constant

Gross Profits

Break Even Volume

Fixed Overhead

18. One advantage of the principle of is that this method allows management to step in if exception conditions exist.

19. A general partner is immune from the liability of partnership debts beyond the amount of his or her investment. (T or F)

20. Profit is always increased by increasing sales volume (T or F).

21. Replacement life is determined at the point that the equipment no longer produces (T or F).

22. A disadvantage of a corporation is that stockholders are exempt from personal liability. (T or F)

23. State laws typically control how your business income is recognized (T or F).

24. Solvency is the ability of a company to pay all legal debts (T or F).

25. Profitability ratios measure returns generated on investment and sales (T or F).

26. A disadvantage of a corporation is that stockholders are exempt from personal liability. (T or F)

27. Your firm generates $7,362,725 in revenue annually. Your general and administrative overhead costs are $465,000 and fixed portion of overhead is $325,500. You are considering a capital improvement project that will increase revenues by $3,000,000. Assuming G&A overhead remains constant, is this project within your relevant range of revenue?

28. You determine that if you pursue the project you will need to increase fixed costs by $125,500 and you must maintain a minimum of 3.75% net profit margins for the organization. Will you determine to pursue the project or reject it?

29. using the attached financial statements, determine the following, and describe its relationship with industry averages:

a. Quick ratio:

b.. Working capital turnover ratio:

c. Days in accounts receivable:

d. Return on equity:

e. Assets Turnover Ratio: g. fixed asset newness:

30. If your Debt to Equity Ratio is above 3.0, what steps could/should you take to improve your condition?

31. How does the return on equity compare with industry averages? Explain the importance of this ratio to potential investors?

32. Explain how purchasing equipment with cash can negatively impact the working capital turnover ratio.?

33. What advice would you give this company in terms of their Days in Accounts Receivable and the industry :tvetage for this ratio'?

34. In your own words. describe the principle of Management by Exception. Is this an effective management tool, why? Or why not?

35. Determine the initial investment required in order to gain $200,000 annuity at 12% APR, over 20 years

35. You have an opportunity to purchase a parcel for development. The owner is selling the parcel for $120,000 and is willing to finance

the lot for $2,300/mo for five years. You have the option to finance the parcel with a bank for 6%APR. Which option would you

choose for financing.

36. Determine the monthly Payment for a $25,000 truck purchase, which is financed for 5 years at 9% APR .