GreenGrow Limited is a local landscaping company that does household and commercial landscaping. Primarily, they help business select plants and manage the plants. They also have regular maintenance contracts such as watering, weeding, and mowing. In the winter, they have some contracts for managing the indoor plants of shopping malls, and do snow clearing to help boost that low income season. Joey, the majority shareholder of GreenGrow is ecstatic. He has managed to come in as the low bidder for a new type of contract. He bid on the construction of a track for the track and field area of a local college. A piece of land on the north end of the college is being cleared and GreenGrow will be leveling the land and placing a bed of crushed stone for the track. Joey has just the right person to be in charge. Jack has previous experience working as an assistant on a road crew and knows how to use the surveying equipment needed to keep the track level. This is a big contract, representing 40% of the year's revenues. What are the biggest inherent risks in this case? A) Posibility of not being able to collect the amount when the job is finished and Jack may get hurt during the job and unable to finish it B) New source of revenue is unfamiliar to the company and the college is a seasonal business C) Weather conditions may interupt the completion of the new job and Joey may run out of money to finance the new project D) New source of revenue is unfamiliar to the company and depending on Jack's limited experience in that industry
GreenGrow Limited is a local landscaping company that does household and commercial landscaping. Primarily, they help business select plants and manage the plants. They also have regular maintenance contracts such as watering, weeding, and mowing. In the winter, they have some contracts for managing the indoor plants of shopping malls, and do snow clearing to help boost that low income season.
Joey, the majority shareholder of GreenGrow is ecstatic. He has managed to come in as the low bidder for a new type of contract. He bid on the construction of a track for the track and field area of a local college. A piece of land on the north end of the college is being cleared and GreenGrow will be leveling the land and placing a bed of crushed stone for the track. Joey has just the right person to be in charge. Jack has previous experience working as an assistant on a road crew and knows how to use the surveying equipment needed to keep the track level. This is a big contract, representing 40% of the year's revenues.
What are the biggest inherent risks in this case?
A) Posibility of not being able to collect the amount when the job is finished and Jack may get hurt during the job and unable to finish it
B) New source of revenue is unfamiliar to the company and the college is a seasonal business
C) Weather conditions may interupt the completion of the new job and Joey may run out of money to finance the new project
D) New source of revenue is unfamiliar to the company and depending on Jack's limited experience in that industry
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