A construction company worked on multiple projects shown in Figure 2 during a year. Based on the information provided, answer the following questions. Note that one project manager can oversee four subdivisions or one road construction project. Q5-F2.pngFigure 2 Projects Completed by a Construction Company in a Year What is the gross profit margin for the subdivision profit center?

Referring to Figure 2 and Question 5, what is the return on cash invested for the subdivision profit center?

The table below shows a cost-loaded schedule of a project. Note that when a task spans more than one week, the costs should be divided equally among the weeks. QZ4-F1.png What is the estimated cost of the work performed during the first week given the tasks with their associated costs and schedules?

Why is depreciation used for a long-term asset?

Highway contractors generally have higher current liabilities-to-net worth and debt-to-equity ratios than residential contractors.

Recording $1,800 of depreciation on the general office decreases total assets, profit, and equity by $1,800.

The excavator is rented for $2,500 per month. The contractor’s profit decreases by $2,500 each month.

When preparing a bid, a contractor may increase its overhead and profit markup if its gross profit margin has been too low.

A contractor purchases a truck for $60,000. The truck has a 5-year useful life and an estimated $10,000 salvage value. Using the Sum-of-the-Years (SOY) method, what is the depreciation expense in Year 2?

A very short Average Age of Accounts Payable may indicate that a company is underusing trade financing.