SOLUTION MANUAL FOR
CONSTRUTION AND FINANCIAL
MANAGEMENT 4TH EDITION |1-18
CHAPTERS COVERED
1
, CONTENTS
Error! Bookmark not defined.
Chapter 1: Construction Financial Management 4
Chapter 2: Construction Accounting Systems 6
Chapter 3: Accounting Transactions 10
Chapter 4: More Construction Accounting 40
Chapter 5: Depreciation 57
Chapter 6: Analysis of Financial Statements 82
Chapter 7: Managing Costs 96
Chapter 8: Determining Labor Burden 102
Chapter 9: Managing General Overhead Costs 106
Chapter 10: Setting Profit Margins for Bidding 108
Chapter 11: Profit Center Analysis 114
Chapter 12: Cash Flows For Construction Projects 123
Chapter 13: Projecting Income Taxes 139
Chapter 14: Cash Flows for a Construction Company 144
Chapter 15: Time Value of Money 146
Chapter 16: Financing a Company’s Financial Needs 153
Chapter 17: Making Financial Decisions 167
Chapter 18: Income Taxes and Financial Decisions 200
2
,3
, Chapter 1: Construction Financial Management
Learning Objectives
At the completion of this chapter the student should be able to:
Explain why financial management is so important to a construction company.
Explain why financial management is different for construction companies
than formost other industries.
Understand that all managerial employees from the owner to the crew
forepersonplay a role in financial management of a construction company.
Instructional Hints
Compare a construction company to a manufacturing plant. Emphasize the
differences between a construction company and a manufacturing plant,
particularly: construction companies build unique products and the
equipment isnot usually stationary at single location. These are the reasons
a construction company needs a job cost system and an equipment cost
system.
Activities
Invite a financial manager (for example, an accountant or general manager)
from aconstruction company to your class to discuss their role as a financial
manager.
Have each student interview a management employee for a construction
company.The interviews should include owners, project managers,
superintendents, and forepersons. Each student is to find out how the
employee contributes to the financial management of the company. Discuss
their findings in class.
Instruction Resources
The figures from this chapter in electronic format and PowerPoint slides
can befound at the instructor’s website.
Data on construction failures can be obtained from the Surety Information
Office(www.sio.org).
Current data on construction company failures can be found at
http://www.census.gov/ces/dataproducts/bds/data_firm.html. The most
useful datacomes from reports that include the sector (e.g., Sector, Firm Age
by Sector, and Firm Size by Sector) because construction can be separated
from other industries.
4
CONSTRUTION AND FINANCIAL
MANAGEMENT 4TH EDITION |1-18
CHAPTERS COVERED
1
, CONTENTS
Error! Bookmark not defined.
Chapter 1: Construction Financial Management 4
Chapter 2: Construction Accounting Systems 6
Chapter 3: Accounting Transactions 10
Chapter 4: More Construction Accounting 40
Chapter 5: Depreciation 57
Chapter 6: Analysis of Financial Statements 82
Chapter 7: Managing Costs 96
Chapter 8: Determining Labor Burden 102
Chapter 9: Managing General Overhead Costs 106
Chapter 10: Setting Profit Margins for Bidding 108
Chapter 11: Profit Center Analysis 114
Chapter 12: Cash Flows For Construction Projects 123
Chapter 13: Projecting Income Taxes 139
Chapter 14: Cash Flows for a Construction Company 144
Chapter 15: Time Value of Money 146
Chapter 16: Financing a Company’s Financial Needs 153
Chapter 17: Making Financial Decisions 167
Chapter 18: Income Taxes and Financial Decisions 200
2
,3
, Chapter 1: Construction Financial Management
Learning Objectives
At the completion of this chapter the student should be able to:
Explain why financial management is so important to a construction company.
Explain why financial management is different for construction companies
than formost other industries.
Understand that all managerial employees from the owner to the crew
forepersonplay a role in financial management of a construction company.
Instructional Hints
Compare a construction company to a manufacturing plant. Emphasize the
differences between a construction company and a manufacturing plant,
particularly: construction companies build unique products and the
equipment isnot usually stationary at single location. These are the reasons
a construction company needs a job cost system and an equipment cost
system.
Activities
Invite a financial manager (for example, an accountant or general manager)
from aconstruction company to your class to discuss their role as a financial
manager.
Have each student interview a management employee for a construction
company.The interviews should include owners, project managers,
superintendents, and forepersons. Each student is to find out how the
employee contributes to the financial management of the company. Discuss
their findings in class.
Instruction Resources
The figures from this chapter in electronic format and PowerPoint slides
can befound at the instructor’s website.
Data on construction failures can be obtained from the Surety Information
Office(www.sio.org).
Current data on construction company failures can be found at
http://www.census.gov/ces/dataproducts/bds/data_firm.html. The most
useful datacomes from reports that include the sector (e.g., Sector, Firm Age
by Sector, and Firm Size by Sector) because construction can be separated
from other industries.
4
