Hello- I think this might be a question for an NCARB moderator. It has to do with adding percentage markups for profit. For example in the PjM slide show practice question # 9, we have to add 10% contractor's overhead and profit. In the answer, it says to take the total construction cost $108,810 and multiply by 110% to get the total including OH and profit, which comes out to $119,681. That means the contractor's OH and profit is $10,871.
But: if you took the final total of $119,681 and multiplied that by 10%, you'd get contractor's OH and profit = $11,968.
OR: if you took the construction cost $108,810 and divided that by 0.9 (the complement of 10% as per the method suggested in AHPP pg 415) then the total would be $120,900 leaving the GC with $12,090 OH and profit. In other words the construction cost is 90% of the final total and the OH/profit is 10% of the final total.
So I guess the question is: are we calculating 10% profit as 10% of the final total - which is how we'd normally figure net profit? Or as 110% of the construction cost? I know it's likely to be only one question on the exam but I'd like to know.
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