300 Review Questions Chapt 6 PDF

1\. Cost models follow the structure of the \_\_\_\_\_\_\_\_\_\_ models. - a\) Generalized linear - b\) Regression-based - c\) Generic/hybrid - d\) Statistical assessment Answer: c) Generic/hybrid Explanation: Cost models typically follow a generic or hybrid structure, combining aspect...

1\. Cost models follow the structure of the \_\_\_\_\_\_\_\_\_\_ models. - a\) Generalized linear - b\) Regression-based - c\) Generic/hybrid - d\) Statistical assessment Answer: c) Generic/hybrid Explanation: Cost models typically follow a generic or hybrid structure, combining aspects of different models to allow for flexibility and accuracy in valuation. 2\. \_\_\_\_\_\_\_\_\_\_ should contain replacement cost tables, depreciation schedules, guidelines for classifying structures, and building feature codes. - a\) Cost models - b\) Cost manuals - c\) Construction guides - d\) Depreciation tables Answer: b) Cost manuals Explanation: Cost manuals are comprehensive documents containing essential valuation tools such as replacement cost tables, depreciation schedules, and classification guidelines. 3\. Material, labor, and supervision are considered \_\_\_\_\_\_\_\_\_\_. - a\) Indirect costs - b\) Overhead costs - c\) Fixed costs - d\) Direct costs Answer: d) Direct costs Explanation: Material, labor, and supervision are categorized as direct costs because they are directly involved in the construction process. 4\. \_\_\_\_\_\_\_\_\_\_ is the cost for constructing an identical structure. - a\) Replacement - b\) Reproduction - c\) Renovation - d\) Retrofitting Answer: b) Reproduction Explanation: Reproduction cost refers to the cost of constructing an exact replica of an existing structure. 5\. Insurance, architectural, and engineering fees are examples of \_\_\_\_\_\_\_\_\_\_ costs. - a\) Direct - b\) Indirect - c\) Fixed - d\) Operating Answer: b) Indirect Explanation: Indirect costs include expenses like insurance, architectural, and engineering fees, which are not directly tied to the physical construction but are necessary for the project. 6\. \_\_\_\_\_\_\_\_\_\_ is the cost of constructing a substitute structure of equal utility. - a\) Reproduction - b\) Replacement - c\) Renovation - d\) Restoration Answer: b) Replacement Explanation: Replacement cost involves building a structure with the same function and utility, though not necessarily identical in design. 7\. Depreciation schedules must reflect differences in building and construction types and must be derived from the \_\_\_\_\_\_\_\_\_\_. - a\) Market - b\) Cost manual - c\) Building codes - d\) Construction standards Answer: a) Market Explanation: Depreciation schedules are derived from market data to reflect realistic decreases in value based on building and construction types. 8\. Floors and roofing are examples of \_\_\_\_\_\_\_\_\_\_ cost components. - a\) Vertical - b\) Horizontal - c\) Direct - d\) Indirect Answer: b) Horizontal Explanation: Floors and roofing are horizontal cost components as they relate to elements that are installed horizontally within a structure. 9\. When applying the comparative unit method, costs are expressed on a per \_\_\_\_\_\_\_\_\_\_ basis. - a\) Linear foot - b\) Square foot - c\) Unit - d\) Property Answer: b) Square foot Explanation: The comparative unit method calculates costs on a per square foot basis, making it easier to estimate construction costs. 10\. Proper application of the \_\_\_\_\_\_\_\_\_\_ method requires detailed knowledge of construction. - a\) Unit-in-place - b\) Quantity survey - c\) Comparative - d\) Cost analysis Answer: b) Quantity survey Explanation: The quantity survey method involves a highly detailed and itemized approach to calculating costs, which requires a deep understanding of construction processes. 11\. \_\_\_\_\_\_\_\_\_\_ is the amount one expects to receive for their contribution to a project that includes risk. - a\) Developer's fee - b\) Entrepreneurial incentive - c\) Investment return - d\) Profit margin Answer: b) Entrepreneurial incentive Explanation: Entrepreneurial incentive refers to the expected compensation for taking on risk in a project, above and beyond regular costs.