When Is It Better for a Construction fiRm to Hire

question 21

Multiple Choice

When is it better for a construction firm to hire architects rather than contract them through the market?

• A) When the in-house contracts with the architects is complete.
• B) When it is difficult to monitor the performance of the hired architects.
• C) When the transaction costs of contracting them through the market are low.
• D) When the enforcement of the market contracts is difficult.

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Definitions:

Reportable Segment Sales Revenue

The revenue generated from sales within a specific segment of a business that must be reported separately in financial statements according to accounting standards.

Consolidation Process

The procedure in financial accounting by which the financial statements of a parent company and its subsidiaries are combined to present as those of a single economic entity, adjusting for intragroup transactions and balances.

Segment Profit or Loss

It is the financial result (either profit or loss) generated by a specific segment or division within a company, separate from its overall results.

Disclosure

The process of providing vital information to shareholders and the public, often related to financial performance and operations.