Texas Property Tax Consultant Practice Exam

What is the total value of a property if total construction costs are $33.99/sq. ft., with an entrepreneurial profit of 10%, on a land valued at $650,000 and 59,400 square feet?

1. $2,870,000

2. $2,669,000

3. $2,222,000

4. $2,467,000

The correct answer is: $2,870,000

To determine the total value of the property, we start by calculating the total construction costs. The total construction cost is derived by multiplying the cost per square foot by the total square footage of the property. Given that the construction cost is $33.99 per square foot and the property has 59,400 square feet, the calculation looks like this: Total construction cost = $33.99/sq. ft. * 59,400 sq. ft. = $2,014,626 Next, we need to incorporate the entrepreneurial profit. Entrepreneurial profit is typically realized as a percentage of the total construction costs. In this case, the entrepreneurial profit is set at 10%. To calculate this profit, we take 10% of the total construction costs: Entrepreneurial profit = 10% of $2,014,626 = $201,462.60 Now, we’ve obtained both the total construction costs and the entrepreneurial profit. To find the total cost before including the land value, we add these two figures together: Total cost (construction + profit) = $2,014,626 + $201,462.60 = $2,216,088.60 Finally, to arrive at the total value of