AFSB 152 - The Institutes Practice Exam Questions and Answers 2023

AFSB 152 - The Institutes Practice Exam Questions and Answers 2023 Lansing Construction Company completed major jobs including road grading, bridges, and base and paving work. Which one of the following types of contractors is Lansing? • Heavy and highway construction • General Engineering contractor • General Building contractor • Design/build contractor - Correct Answer-Heavy and highway construction The project owner for a new shopping plaza being built in Highville is the Highville Municipal Property Company. The role of the project owner at the beginning of any construction project is to • Engage consultants in fields in which it lacks the expertise necessary for the project • Define a need for a facility and engage an architect or an engineer • Furnish an estimated project cost that may be used to negotiate financing for the project • Design the facility and prepare the plans and specifications for its construction - Correct Answer-Define a need for a facility and engage an architect or an engineer In construction contracts, the critical path method • Ensures that, during mobilization, the crew moves big equipment from one location to another following the shortest route, in terms of mileage • Ensures that, during mobilization, the crew moves big equipment from one location to another on less-used roads and during times when traffic is minimal • Ensures that work is completed in a logical sequence and that the project is completed within the time budget specified in the contract terms • Ensures that all minor finishing tasks, identified in a punch list, are completed before the project reaches substantial completion - Correct Answer-Ensures that work is completed in a logical sequence and that the project is completed within the time budget specified in the contract terms The party that directly benefits from the additional security of knowing that the contractor has satisfied the surety's comprehensive prequalification review is the • Suppliers • Laborers • Project Owners • Architect or engineer - Correct Answer-Project Owners Private work is not bid as tightly as public work because all bidders usually understand that a fair markup of a contractor's work is expected and that - Numerous, unexpected change orders would become a nuisance - The owner, architect, and contractor are likely to collaborate on a private project - The quality of work on private projects is expected to meet only the specific standards - When the contractor begins to seek extras, owners and architects believe they are being mistreated - Correct Answer-Numerous, unexpected change orders would become a nuisance Due to the scope of the project, Cortland Company and May Contracting agreed to a cost-plus construction contract. Which one of the following accurately describes a cost-plus construction contract? - A cost-plus contract includes cost of work and a fee for overhead and profit. - A cost-plus contract is a fixed-price contract with a changes clause. - A cost-plus contract includes costs of materials plus labor costs. - A cost-plus contract includes work costs agreed to in advance plus cost overruns. - Correct Answer-A cost-plus contract includes cost of work and a fee for overhead and profit. Which one of the following correctly describes the right of an owner or a contractor to terminate a contract? - An owner or a contractor can terminate a contract at any time for any reasonable cause. - Without a termination clause, an owner or a contractor can terminate a contract only for a material breach of contract. - Without a termination clause, an owner can terminate a contract, but a contractor cannot. - Without a termination clause, an owner or a contractor cannot terminate a contract for any reason. - Correct Answer-Without a termination clause, an owner or a contractor can terminate a contract only for a material breach of contract. A limited liability company is most similar to a: - Subchapter S corporation. - Subchapter C corporation. - Joint venture. - General partnership. - Correct Answer-Subchapter S corporation: - Tax liability is passed through to the individual members similar to the way tax liability is passed to shareholders in S Corps. Mediation has become a favored form of dispute resolution. Which one of the following statements is true regarding mediation? - Mediation is the most time-consuming form of dispute resolution. - Mediation encourages parties to make offers and counteroffers. - Mediation develops a solution which is final and binding. - Mediation often results in shock verdicts. - Correct Answer-Mediation encourages parties to make offers and counteroffers. Which one of the following is correct regarding the statute of limitations for filing a lawsuit regarding a claim under the Miller Act? - The statute of limitations is one year. - The statute of limitations is 90 days. - There is no statute of limitations. - The statute of limitations is determined by state law. - Correct Answer-The statute of limitations is one year. Contractor Marshall has been presented with a unit-priced contract from project owner Grayson Properties. A unit-price contract is used - For most construction contracts. - To provide a sharing agreement. - To provide a maximum guaranteed price. - When the quantity of work cannot be determined in advance. - Correct Answer-When the quantity of work cannot be determined in advance. Which one of the following is true regarding joint ventures? - All partners must participate equally in a joint venture. - All partners are always fully responsible for the entire project. - In a silent joint venture, the silent partner has limited responsibility. - A limited joint venture can be formed to limit an individual's participation. - Correct Answer-A limited joint venture can be formed to limit an individual's participation. Which one of the following correctly describes those who must give notice to the prime contractor under the Miller Act? - Only second-tier claimants are required to give notice to the prime contractor. - No one filing a claim under the Miller Act is required to give notice to the prime contractor. - Only first-tier claimants are required to give notice to the prime contractor. - All claimants are required to give notice to the prime contractor. - Correct Answer-Only second-tier claimants are required to give notice to the prime contractor. Ewing General Contracting (EGC) entered a contract to complete a major renovation for Ralph's Restaurant. Because Ralph's is located in a tourist town, it was important that the construction work be completed by May 1. The construction contract included a provision that stated that if the job was not completed by May 1, EGC would be assessed $500 a day for each day of delay in completing the project. These damages to be paid by EGC are known as - Direct damages. - Consequential damages. - Liquidated damages. - Actual damages. - Correct Answer-Liquidated damages. The costliest method of contract dispute resolution is typically - Contract termination. - Mediation. - Arbitration. - Litigation. - Correct Answer-Litigation. A proprietor of a sole proprietorship is - Entitled to all the profits and responsible for a portion of liabilities. - Entitled to all the profits and is not responsible for any liability. - Entitled to a portion of the profits and responsible for all liabilities. - Entitled to all the profits and responsible for all liabilities. - Correct Answer-Entitled to all the profits and responsible for all liabilities. Which one of the following correctly describes a state mechanic's lien law? - A state mechanic's lien law allows a laborer to file a lien against a contractor or subcontractor. - A state mechanic's lien law allows a contractor to file a lien against the state government. - A state mechanic's lien law allows a subcontractor to file a lien against the primary contractor. - A state mechanic's lien law allows a supplier of labor or materials to file a lien against the property owner's real estate. - Correct Answer-A state mechanic's lien law allows a supplier of labor or materials to file a lien against the property owner's real estate. The construction industry most commonly uses the - Cost-plus contract. - Unit-price contract. - Guaranteed maximum price contract. - Fixed-price contract. - Correct Answer-Fixed-price contract. Which one of the following correctly describes the employer-employee relationship in the construction industry? - The National Labor Relations Act determines all aspects of the employer-employee relationship in the construction industry. - The employer-employee relationship in the construction industry is the same as in most other industries. - There are typically employees of different employers, some of whom may be union members, in the construction industry. - The employer-employee relationship in the construction industry is always influenced by unions. - Correct Answer-There are typically employees of different employers, some of whom may be union members, in the construct