SM 486 EXAM 2 QUESTIONS ANSWERED CORRECTLY LATEST UPDATE 2026
What are the key financial management tasks in facility financing? - Answers Recording, monitoring,
and controlling the financial consequences of past and current operations, and acquiring funds to
meet current and future needs.
How much do the NY Giants and Jets expect to earn annually from advertising and premium seats? -
Answers $184 million.
What is the expected annual income from corporate sponsorships for the NY Giants and Jets? -
Answers $35 million.
How much do the NY Giants and Jets plan to finance the construction of their new stadium? -
Answers About $1 billion.
What was the total expenditure by Ohio State University on sports facilities in 2003? - Answers More
than $300 million.
What was the cost breakdown for the Ohio State University football stadium renovations? - Answers
$190 million for luxury boxes, $110 million for basketball/hockey arena, and $10 million for a new
track and field stadium.
What was the total cost to build Florida Atlantic University's football stadium? - Answers $69.8
million.
What is the estimated cost for building or renovating recreational facilities managed by NIRSA
members over the next five years? - Answers $4.9 billion.
Why is cash flow important for facility managers? - Answers It shows the ability to meet future debt
obligations that may finance the facility.
What are compulsory income sources for public facilities? - Answers Funds secured through taxes,
licensing, or other government-generated sources.
What is gratuitous income? - Answers Income received with no expectation of return, such as gifts
and donations.
What is the primary motive for commercial organizations in facility financing? - Answers Profit
generation.
What are the characteristics of public sector financing for parks and recreation? - Answers Operates
at a loss, funded by taxation, and limited accountability for budget deviations.
What is the structure of a not-for-profit organization like the YMCA? - Answers Board → Executive
Officer → Finance Department.
What is the role of the facility financial team? - Answers Includes facility manager/staff, business plan
consultant, architect, construction manager, and legal counsel.
What are the types of public funding sources for sports facilities? - Answers Taxes, bonds, and tax
increment financing (TIF).
What is a bond in the context of facility financing? - Answers An interest-bearing certificate issued by
a government or corporation promising to pay back the principal with interest at a future date.
What are general obligation bonds? - Answers Guaranteed bonds backed by the full faith of the
issuing body, often requiring a vote.
What are revenue bonds? - Answers Bonds sold based on repayment from revenue sources, often
with higher interest rates and no requirement for a reserve fund.
What is the purpose of Certificates of Participation (COPs)? - Answers To raise money for building
facilities, with the government leasing portions to the public to repay the bonds.
What is tax increment financing? - Answers A method that freezes tax increases in the area of a
facility, using any increases in the tax base to repay bonds.
What are some examples of income sources for facility financing? - Answers Entrance fees, rental
fees, user fees, and sales revenue.
What is the expected economic impact of Florida Atlantic University's football stadium? - Answers
$1.7 million for 20,000 people.
What are the financing concerns from a public perspective? - Answers Minimizing public subsidy to
expand cash flow.
What is the distinction between guaranteed and non-guaranteed bonds? - Answers Guaranteed
bonds are backed by the issuing body, while non-guaranteed bonds rely on revenue sources for
repayment.
What is the significance of earned income in not-for-profit financing? - Answers It may be part of the
income, but the organization must break even at the end of the fiscal year.
, What is a key benefit of urban area frequency in facility financing? - Answers It reduces the impact on
real property taxes and is paid by those who benefit from the facility in the contiguous area.
What are naming rights in the context of facility funding? - Answers The right to place a corporate
name on a facility for a specific sum of money and years.
What is a Permanent Seat License (PSL)? - Answers An upfront payment that grants the right to
specific seats in a stadium.
What is the role of concessionaire exclusivity in facility financing? - Answers It grants exclusive rights
to a vendor, such as Aramark, for concessions at the facility.
What is the purpose of lease agreements in facility financing? - Answers To rent offices during the off-
season, generating additional revenue.
What is the public vs. private financing debate focused on? - Answers Public financing supporters
argue for job creation and economic impact, while private financing supporters claim new stadiums
redistribute rather than create economic activity.
What is the significance of the relationship between government and sports team owners in facility
financing? - Answers Local governments help fund stadium costs expecting economic benefits from
sports events, leading to job creation and increased revenue.
What are the steps in college facility financing? - Answers Research college policy, determine
relationships with surrounding groups, assess facility usage, and create a capital campaign.
What are some sources of funding for college facilities? - Answers Institutional funds, revenue from
intercollegiate athletic teams, fundraising drives, student fees, user fees, and corporate funding.
What does the term 'Budget Education' refer to in facility financing? - Answers It highlights that
similar project types may provide information but do not guarantee similar planning budgets.
What are the six categories of project budget according to Lagerquist & Betti (2001)? - Answers
Development, consultants, site construction, building construction, FF&E (furniture, fixtures, and
equipment), and operations/start-up.
What costs are included in the development category of a project budget? - Answers Costs incurred
prior to construction, including financing, insurance, legal fees, and publicity costs.
What is FF&E in the context of facility financing? - Answers Furniture, fixtures, and equipment costs
that outfit the building and support its operations.
What does the 80/20 rule indicate in project costs? - Answers 80% of a project's cost is contained in
20% of certain items, such as structure, skin, site, mechanical, plumbing, and electrical.
What are bequests and trusts in facility funding? - Answers Estate money that goes to the facility
upon the donor's death.
What is the purpose of a development team in college facility financing? - Answers To survey funding
potential and establish relationships with stakeholders.
What is the significance of the multiplier effect in public financing? - Answers It suggests that new
jobs and fans generated by a facility can lead to broader economic benefits.
What are some examples of private funding methods for facilities? - Answers Cash donations, in-kind
contributions, sponsorships, and naming rights.
What is the role of advertising rights in facility financing? - Answers They provide opportunities for
revenue generation through visibility for advertisers.
What costs are associated with site construction in facility development? - Answers Costs to prepare
the site for building, including soil replacement and utility connections.
What are the potential impacts of new stadiums according to private financing supporters? - Answers
They argue that new stadiums do not create new economic activity but redistribute existing
participants and resources.
What are hard costs in stadium construction? - Answers Tangible or concrete costs such as
construction or permanent furniture.
What are soft costs in stadium construction? - Answers Costs associated with development,
operations, consultants, and start-up.
What is the estimated cost of building a new stadium or arena? - Answers Hundreds of millions of
dollars, with examples like Yankee Stadium over $1 billion.
What are luxury suites in stadiums? - Answers Small, private rooms fitting 10-20 people that generate
revenue through multiyear contracts.
What are naming rights in stadium financing? - Answers Agreements between stadium owners and
corporations to connect brand names to the facility.
What are the key financial management tasks in facility financing? - Answers Recording, monitoring,
and controlling the financial consequences of past and current operations, and acquiring funds to
meet current and future needs.
How much do the NY Giants and Jets expect to earn annually from advertising and premium seats? -
Answers $184 million.
What is the expected annual income from corporate sponsorships for the NY Giants and Jets? -
Answers $35 million.
How much do the NY Giants and Jets plan to finance the construction of their new stadium? -
Answers About $1 billion.
What was the total expenditure by Ohio State University on sports facilities in 2003? - Answers More
than $300 million.
What was the cost breakdown for the Ohio State University football stadium renovations? - Answers
$190 million for luxury boxes, $110 million for basketball/hockey arena, and $10 million for a new
track and field stadium.
What was the total cost to build Florida Atlantic University's football stadium? - Answers $69.8
million.
What is the estimated cost for building or renovating recreational facilities managed by NIRSA
members over the next five years? - Answers $4.9 billion.
Why is cash flow important for facility managers? - Answers It shows the ability to meet future debt
obligations that may finance the facility.
What are compulsory income sources for public facilities? - Answers Funds secured through taxes,
licensing, or other government-generated sources.
What is gratuitous income? - Answers Income received with no expectation of return, such as gifts
and donations.
What is the primary motive for commercial organizations in facility financing? - Answers Profit
generation.
What are the characteristics of public sector financing for parks and recreation? - Answers Operates
at a loss, funded by taxation, and limited accountability for budget deviations.
What is the structure of a not-for-profit organization like the YMCA? - Answers Board → Executive
Officer → Finance Department.
What is the role of the facility financial team? - Answers Includes facility manager/staff, business plan
consultant, architect, construction manager, and legal counsel.
What are the types of public funding sources for sports facilities? - Answers Taxes, bonds, and tax
increment financing (TIF).
What is a bond in the context of facility financing? - Answers An interest-bearing certificate issued by
a government or corporation promising to pay back the principal with interest at a future date.
What are general obligation bonds? - Answers Guaranteed bonds backed by the full faith of the
issuing body, often requiring a vote.
What are revenue bonds? - Answers Bonds sold based on repayment from revenue sources, often
with higher interest rates and no requirement for a reserve fund.
What is the purpose of Certificates of Participation (COPs)? - Answers To raise money for building
facilities, with the government leasing portions to the public to repay the bonds.
What is tax increment financing? - Answers A method that freezes tax increases in the area of a
facility, using any increases in the tax base to repay bonds.
What are some examples of income sources for facility financing? - Answers Entrance fees, rental
fees, user fees, and sales revenue.
What is the expected economic impact of Florida Atlantic University's football stadium? - Answers
$1.7 million for 20,000 people.
What are the financing concerns from a public perspective? - Answers Minimizing public subsidy to
expand cash flow.
What is the distinction between guaranteed and non-guaranteed bonds? - Answers Guaranteed
bonds are backed by the issuing body, while non-guaranteed bonds rely on revenue sources for
repayment.
What is the significance of earned income in not-for-profit financing? - Answers It may be part of the
income, but the organization must break even at the end of the fiscal year.
, What is a key benefit of urban area frequency in facility financing? - Answers It reduces the impact on
real property taxes and is paid by those who benefit from the facility in the contiguous area.
What are naming rights in the context of facility funding? - Answers The right to place a corporate
name on a facility for a specific sum of money and years.
What is a Permanent Seat License (PSL)? - Answers An upfront payment that grants the right to
specific seats in a stadium.
What is the role of concessionaire exclusivity in facility financing? - Answers It grants exclusive rights
to a vendor, such as Aramark, for concessions at the facility.
What is the purpose of lease agreements in facility financing? - Answers To rent offices during the off-
season, generating additional revenue.
What is the public vs. private financing debate focused on? - Answers Public financing supporters
argue for job creation and economic impact, while private financing supporters claim new stadiums
redistribute rather than create economic activity.
What is the significance of the relationship between government and sports team owners in facility
financing? - Answers Local governments help fund stadium costs expecting economic benefits from
sports events, leading to job creation and increased revenue.
What are the steps in college facility financing? - Answers Research college policy, determine
relationships with surrounding groups, assess facility usage, and create a capital campaign.
What are some sources of funding for college facilities? - Answers Institutional funds, revenue from
intercollegiate athletic teams, fundraising drives, student fees, user fees, and corporate funding.
What does the term 'Budget Education' refer to in facility financing? - Answers It highlights that
similar project types may provide information but do not guarantee similar planning budgets.
What are the six categories of project budget according to Lagerquist & Betti (2001)? - Answers
Development, consultants, site construction, building construction, FF&E (furniture, fixtures, and
equipment), and operations/start-up.
What costs are included in the development category of a project budget? - Answers Costs incurred
prior to construction, including financing, insurance, legal fees, and publicity costs.
What is FF&E in the context of facility financing? - Answers Furniture, fixtures, and equipment costs
that outfit the building and support its operations.
What does the 80/20 rule indicate in project costs? - Answers 80% of a project's cost is contained in
20% of certain items, such as structure, skin, site, mechanical, plumbing, and electrical.
What are bequests and trusts in facility funding? - Answers Estate money that goes to the facility
upon the donor's death.
What is the purpose of a development team in college facility financing? - Answers To survey funding
potential and establish relationships with stakeholders.
What is the significance of the multiplier effect in public financing? - Answers It suggests that new
jobs and fans generated by a facility can lead to broader economic benefits.
What are some examples of private funding methods for facilities? - Answers Cash donations, in-kind
contributions, sponsorships, and naming rights.
What is the role of advertising rights in facility financing? - Answers They provide opportunities for
revenue generation through visibility for advertisers.
What costs are associated with site construction in facility development? - Answers Costs to prepare
the site for building, including soil replacement and utility connections.
What are the potential impacts of new stadiums according to private financing supporters? - Answers
They argue that new stadiums do not create new economic activity but redistribute existing
participants and resources.
What are hard costs in stadium construction? - Answers Tangible or concrete costs such as
construction or permanent furniture.
What are soft costs in stadium construction? - Answers Costs associated with development,
operations, consultants, and start-up.
What is the estimated cost of building a new stadium or arena? - Answers Hundreds of millions of
dollars, with examples like Yankee Stadium over $1 billion.
What are luxury suites in stadiums? - Answers Small, private rooms fitting 10-20 people that generate
revenue through multiyear contracts.
What are naming rights in stadium financing? - Answers Agreements between stadium owners and
corporations to connect brand names to the facility.
