Texas Property Tax Consultant Practice Exam

What is the total dollar amount of the soft construction costs if hard construction costs are $1,394,581?

1. $209,187

2. $1,603,768

3. $240,565

4. $1,394,581

The correct answer is: $209,187

To determine the total dollar amount of soft construction costs based on hard construction costs, we need to understand how soft costs are calculated in relation to hard costs. Soft construction costs typically include expenses like architectural fees, permits, and other indirect costs associated with building, which are generally expressed as a percentage of the hard construction costs. If the total amount of soft costs is 15% of the hard construction costs, then the calculation would be: 1. Calculate 15% of $1,394,581 by multiplying: \[ 1,394,581 \times 0.15 = 209,187.15 \] 2. When rounding to the nearest dollar, it results in approximately $209,187. This calculation aligns with the choice provided, confirming that the total dollar amount of the soft construction costs is indeed $209,187. Understanding the relationship between soft and hard costs is critical, as it allows for accurate financial planning and forecasting in construction projects.