Podcast
Questions and Answers
What is Forced Liquidation Value commonly known as?
What is Forced Liquidation Value commonly known as?
- Economic Value
- Scrap Value
- Wholesale Value (correct)
- Book Value
Which of the following values is derived from the resale of individual components of equipment?
Which of the following values is derived from the resale of individual components of equipment?
- Forced Liquidation Value
- Salvage Value (correct)
- Book Value
- Scrap Value
How is Book Value calculated?
How is Book Value calculated?
- Original value plus depreciation
- Current market value of a corporation's assets
- Original value less depreciated accruals (correct)
- Future economic potential of property
What does Scrap Value refer to?
What does Scrap Value refer to?
What is the definition of Residual or Economic Value?
What is the definition of Residual or Economic Value?
What is NOT a characteristic of Forced Liquidation Value?
What is NOT a characteristic of Forced Liquidation Value?
Book Value can also be described as the value of what?
Book Value can also be described as the value of what?
What differentiates Salvage Value from Scrap Value?
What differentiates Salvage Value from Scrap Value?
What is the primary purpose of a union?
What is the primary purpose of a union?
What does 'open shop' refer to in employment?
What does 'open shop' refer to in employment?
What is a significant cost consideration when hiring union versus open shop labor?
What is a significant cost consideration when hiring union versus open shop labor?
What is a reimbursable cost?
What is a reimbursable cost?
What does the Davis Bacon Act mandate for public works projects?
What does the Davis Bacon Act mandate for public works projects?
What distinguishes non-reimbursable costs from reimbursable costs?
What distinguishes non-reimbursable costs from reimbursable costs?
In what scenario would the Davis Bacon Act be applicable?
In what scenario would the Davis Bacon Act be applicable?
What is the implication of using small tools and consumables in construction?
What is the implication of using small tools and consumables in construction?
What does the term 'Fair Value' refer to in property valuation?
What does the term 'Fair Value' refer to in property valuation?
How is 'Market Value' defined in the context of property transactions?
How is 'Market Value' defined in the context of property transactions?
What factors are considered when calculating 'Fair Value'?
What factors are considered when calculating 'Fair Value'?
Which statement best describes the concept of 'Market Value'?
Which statement best describes the concept of 'Market Value'?
What role does the 'capital budget' play in facility component replacement?
What role does the 'capital budget' play in facility component replacement?
What should be accounted for when determining the 'adjusted cost new' of an item?
What should be accounted for when determining the 'adjusted cost new' of an item?
How does the term 'utility' relate to property valuation?
How does the term 'utility' relate to property valuation?
Which factor does NOT influence 'Market Value'?
Which factor does NOT influence 'Market Value'?
Which phase of the project life cycle shows a rapidly decreasing level of influence on scope definition?
Which phase of the project life cycle shows a rapidly decreasing level of influence on scope definition?
At which stage do project expenditures begin to have a major influence?
At which stage do project expenditures begin to have a major influence?
What is the correct sequence of stages in the project life cycle?
What is the correct sequence of stages in the project life cycle?
Which of the following represents a low influence stage in project expenditures?
Which of the following represents a low influence stage in project expenditures?
Which phase is associated with rapid increase in influence at the start of project expenditures?
Which phase is associated with rapid increase in influence at the start of project expenditures?
During which phase is the project expenditure's influence considered to be at a moderate level?
During which phase is the project expenditure's influence considered to be at a moderate level?
Which term best describes the influence of project expenditures during Conceptual Analysis?
Which term best describes the influence of project expenditures during Conceptual Analysis?
Which of the following phases entails the least influence over project expenditures?
Which of the following phases entails the least influence over project expenditures?
What is the primary purpose of pricing in a bid process?
What is the primary purpose of pricing in a bid process?
What does an addendum typically do in the context of bidding documents?
What does an addendum typically do in the context of bidding documents?
How is an allowance defined in cost estimating?
How is an allowance defined in cost estimating?
What characterizes an alternate in a bid request?
What characterizes an alternate in a bid request?
What components are typically included in bid documents?
What components are typically included in bid documents?
Why are allowances important in cost estimating?
Why are allowances important in cost estimating?
What is the difference between additive and deductive alternates?
What is the difference between additive and deductive alternates?
What does the pricing process ensure regarding profits?
What does the pricing process ensure regarding profits?
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Study Notes
Project Influence and Expenditures
- Influence varies throughout the project lifecycle, from conceptual analysis to start-up.
- Project expenditures can be categorized based on levels of influence: major, rapidly decreasing, and low influence.
- The degree of influence impacts project scope and expenditures across different phases including planning and procurement.
Legal and Financial Terminology
- Facility component replacement costs are included in the capital budget during the study period.
- Fair Value: Reflects a reasonable estimate of property value after considering adjustments and utility.
- Market Value: Agreed monetary price between a willing buyer and seller, influenced by market conditions.
- Forced Liquidation Value: Price obtainable at auction when time constraints are significant, often called "blow-out" value.
- Salvage Value: The money a buyer will pay for usable parts of equipment, often for repair or resale.
- Scrap Value: Represents the basic commodity value of equipment.
Asset Valuation Concepts
- Book Value: The current investment value minus depreciated accruals, calculated as original down from the net asset value.
- Residual or Economic Value: The property value considering all expected economic uses over any specific use.
Labor Types
- Union Labor: Organizations advocating for wage earners’ interests regarding compensation and working conditions.
- Open Shop Labor: Employment conditions where both union and non-union workers are permitted, with no union agreements in place.
- Understanding cost differences between union and open-shop labor is vital, particularly in reference to prevailing wage laws.
The Davis Bacon Act
- Enacted in 1931; mandates prevailing wages on federal public works projects.
- Contracts over $2,000 must ensure on-site workers are paid at least the local prevailing wages and benefits.
Subcontracting Considerations
- Reimbursable Costs: Expenditures that can be refunded under company rules.
- Non-Reimbursable Costs: Expenditures that cannot be refunded to employees.
- Pricing: Setting charges to cover all direct and indirect costs, along with potential contingencies and profits.
Cost Estimating Terminology
- Addendum: Written changes issued before bids are opened, affecting bid documents and details.
- Allowances: Resources included in estimates for undefined requirements of specific activities or work items.
- Alternate: Owner’s cost request for adding or deleting items from bids; additive alternates involve additions, deductive alternates involve deletions.
- Bid Documents: Composed of advertisements, instructions, and contracts detailing all aspects of bidding and proposals.
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