Contingency Reserves Require a Construction Company to Hold Back Some

question 15

True/False

Contingency reserves require a construction company to hold back some funds in an account just in case something happens that increases the overall project cost.

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Definitions:

Equity-Financed

Pertains to the method of funding a business through selling shares to investors, thereby increasing ownership equity.

Incremental Value

The additional value created by undertaking a specific project or action, measured by the difference in a firm's value with and without the undertaking.

Outstanding Stock

The total shares of a corporation that are currently owned by all its shareholders, including shares held by institutional investors and restricted blocks held by insiders and company officers.