CONSTRUCTION MANAGEMENT 2026 TEST PAPER
QUESTIONS AND SOLUTIONS SCORED A+
✔✔Which of the following are not true for a corporation?
(a) chartered in a state with issuances of shares of stock
(b). number of total shares and number of shares hold by partners are arbritrary and
does not establish level of ownership
(c). book value of a share is the net worth of corporation divided by the number of
issued shares
(d). value of shares of publicly traded company depends strictly on the value of assets
of the company
(e) corporations can raise capital by selling further stock - ✔✔(b) and (d)
✔✔Choose the correct attributes of a partnership
(a) Risk is divided between the partners equally
(b) Profits and control is divided among general partners based on degree of ownership
(c) There is no limit on liability for partners
(d) Limited partners can increase assets of the company although they have no voice in
management
(e) Signature of all partners is necessary for a binding contract
(f) Death of a partner ends the partnership unless there are clauses in the charter that
makes arrangements for this situation - ✔✔(b), (c), (d), (f)
✔✔The amount remaining after subtraction of direct expenses from total revenues is
called [A]. - ✔✔gross profit
✔✔If a company posts a Net Operating Loss (NOL) in a given year, they are allowed to
get back some or all of the taxes they paid in the last three years which is called
carrying the loss back.
T or F - ✔✔T
✔✔Taxable income of corporations is calculated by subtracting their direct and indirect
expenses from their revenues
T or F - ✔✔T
✔✔Which of the following is not affected by the legal structure of a construction
company?
(a) % of successful bids
(b) taxation
(c) liability
(d) ability to raise capital - ✔✔(a)
✔✔Which of the following are not an attribute of a joint venture?
, (a) Gathers financial and technical resources of two or multiple companies for a project
(b) Exists for a fixed period of time defined by the duration of a project
(c) Owner signs a single contract with the joint venture although the joint venture
comprises of multiple companies
(d) Joint ventures are not considered legal entities therefore contracts have to be signed
by all members of joint ventures for validity - ✔✔(d)
✔✔Which of the following is not a valid attribute of a proprietorship?
(a) No separation between individual and firm assets
(b) creditors cannot come after personal property of the owner
(c) credit is limited by personal assets of the owner
(d) no separate taxation of the company - ✔✔(b)
✔✔ Based on the guide quantity of 100 CY on a bid document for rock excavation, a
contractor bid a unit price of $20/CY. If the owner's representative determined that the
contractor excavated 85 CY of rock during construction, how much will the contractor
get paid?
(a). $2000
(b). $1700
(c). $300
(d). $1800 - ✔✔(b)
✔✔Which of the following documents are included in the bid package?
I. Proposal Form
II. Special Conditions
III. Technical Specifications
IV. General Conditions
V. Bid Bond
(a). I, II, and III
(b). II, III, and IV
(c). I, II, IV, and V
(d). I, II, III, and IV - ✔✔(d)
✔✔The document requested by the owner as a protection against the risk of the
contractor not accepting the job once awarded the project is
(a). Insurance
(b). Performance Bond
(c). Bid Bond
(d). Payment Bond - ✔✔(c)
✔✔Which of the following would not be considered an excusable delay?
(a). Labor Strikes
(b). Review process delays
(c). A hurricane closing a port delaying delivery of materials
(d). Death of a contractor - ✔✔(b)
QUESTIONS AND SOLUTIONS SCORED A+
✔✔Which of the following are not true for a corporation?
(a) chartered in a state with issuances of shares of stock
(b). number of total shares and number of shares hold by partners are arbritrary and
does not establish level of ownership
(c). book value of a share is the net worth of corporation divided by the number of
issued shares
(d). value of shares of publicly traded company depends strictly on the value of assets
of the company
(e) corporations can raise capital by selling further stock - ✔✔(b) and (d)
✔✔Choose the correct attributes of a partnership
(a) Risk is divided between the partners equally
(b) Profits and control is divided among general partners based on degree of ownership
(c) There is no limit on liability for partners
(d) Limited partners can increase assets of the company although they have no voice in
management
(e) Signature of all partners is necessary for a binding contract
(f) Death of a partner ends the partnership unless there are clauses in the charter that
makes arrangements for this situation - ✔✔(b), (c), (d), (f)
✔✔The amount remaining after subtraction of direct expenses from total revenues is
called [A]. - ✔✔gross profit
✔✔If a company posts a Net Operating Loss (NOL) in a given year, they are allowed to
get back some or all of the taxes they paid in the last three years which is called
carrying the loss back.
T or F - ✔✔T
✔✔Taxable income of corporations is calculated by subtracting their direct and indirect
expenses from their revenues
T or F - ✔✔T
✔✔Which of the following is not affected by the legal structure of a construction
company?
(a) % of successful bids
(b) taxation
(c) liability
(d) ability to raise capital - ✔✔(a)
✔✔Which of the following are not an attribute of a joint venture?
, (a) Gathers financial and technical resources of two or multiple companies for a project
(b) Exists for a fixed period of time defined by the duration of a project
(c) Owner signs a single contract with the joint venture although the joint venture
comprises of multiple companies
(d) Joint ventures are not considered legal entities therefore contracts have to be signed
by all members of joint ventures for validity - ✔✔(d)
✔✔Which of the following is not a valid attribute of a proprietorship?
(a) No separation between individual and firm assets
(b) creditors cannot come after personal property of the owner
(c) credit is limited by personal assets of the owner
(d) no separate taxation of the company - ✔✔(b)
✔✔ Based on the guide quantity of 100 CY on a bid document for rock excavation, a
contractor bid a unit price of $20/CY. If the owner's representative determined that the
contractor excavated 85 CY of rock during construction, how much will the contractor
get paid?
(a). $2000
(b). $1700
(c). $300
(d). $1800 - ✔✔(b)
✔✔Which of the following documents are included in the bid package?
I. Proposal Form
II. Special Conditions
III. Technical Specifications
IV. General Conditions
V. Bid Bond
(a). I, II, and III
(b). II, III, and IV
(c). I, II, IV, and V
(d). I, II, III, and IV - ✔✔(d)
✔✔The document requested by the owner as a protection against the risk of the
contractor not accepting the job once awarded the project is
(a). Insurance
(b). Performance Bond
(c). Bid Bond
(d). Payment Bond - ✔✔(c)
✔✔Which of the following would not be considered an excusable delay?
(a). Labor Strikes
(b). Review process delays
(c). A hurricane closing a port delaying delivery of materials
(d). Death of a contractor - ✔✔(b)
