ARE 5.0 CONSTRUCTION & EVALUATION
2026 | COMPLETE STUDY GUIDE &
PRACTICE QUESTIONS
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales Included
,Cost estimating method used during the Design Development
Detailed pricing based on the actual components being considered, including windows,
curtain walls, finishes and equipment.
Cost estimating method used during the Construction Documents
Complete and final pricing of the project, based on direct quotes from suppliers, installers,
sub-contractors and manufacturers.
Requires great deal of effort and can only be done once nearly everything in the building
has been specified.
This pricing is a final check before construction begins/allows for revision to the design as
needed to meet the budget.
Factors that can have an effect on cost estimates
1. Availability of labor & material, labor rates, material prices, resources to produce the
material, convenience of transportation, location (more remote = more costly), less
predictable costs of rural areas.
2. High Interest Rates = less housing construction = lower material prices
Increased cost of living = increased union wages and higher labor costs
Typical profit margin factored into the Construction Cost estimate
15-20% for smaller projects
10-15% for larger projects
5-10% for ver large projects
,Typical fees of Engineering Consultants (Struc., MEP, Civil)
Mechanical: 15%
Electrical: 12.5%
Civil: 10.5%
Structural: 9.4%
(% Construction Cost)
ENR 20 Cities Building Cost Index
Cost estimating with Parameter Costs can be adapted to a city by using ______ or adding an
inflation factor.
A Pro-forma is a financial analysis of the building project, showing costs and return on
investment.
This report is typically done by the client at the beginning of the project to determine if the
project will be profitable.
What is Pro-forma?
Who does it?
During what phase of the project is it typically done?
General Obligation Bond
Municipal bond issues when a state or local government wants to raise money for a
project.
Shareholders (investors) are guaranteed to be repaid using future tax revenues.
Revenue Bond
Type of municipal bond where the shareholders are promised payment from the revenue
collection of the project, such as tolls from a new bridge, instead of being repaid by future
tax revenue.
It is less secure than a General Obligation Bond and typically offer slightly higher interest
rates.
, (5) phases used by firms to help in cost estimating
1. Pre-planning/Proposal Phase: Cost is broken down by units, which would come from the
occupancy of the building.
2. Programming Phase: Function of spaces and unit costs come from similar buildings.
3. Schematic Design: Determines major elements in the building, such as number of
plumbing fixtures, electrical layout, structure, and mechanical systems.
4. Design Development: Defined materials like windows, doors, dropped ceilings, and
cabinets are added.
5. Construction Documents: Finishes are in place and should reflect the pre-bid cost
breakdowns.
Depreciation
Federal tax benefit given for the decrease in the value of assets over time.
Quantity and Quality (in regards to project budget)
Change in one will ultimately affect the other.
Sometimes these changes are negative, such as if the Owner decides to increase the
quantity of an item in the building and thus reduce the quality in order to keep the budget
intact.
2026 | COMPLETE STUDY GUIDE &
PRACTICE QUESTIONS
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales Included
,Cost estimating method used during the Design Development
Detailed pricing based on the actual components being considered, including windows,
curtain walls, finishes and equipment.
Cost estimating method used during the Construction Documents
Complete and final pricing of the project, based on direct quotes from suppliers, installers,
sub-contractors and manufacturers.
Requires great deal of effort and can only be done once nearly everything in the building
has been specified.
This pricing is a final check before construction begins/allows for revision to the design as
needed to meet the budget.
Factors that can have an effect on cost estimates
1. Availability of labor & material, labor rates, material prices, resources to produce the
material, convenience of transportation, location (more remote = more costly), less
predictable costs of rural areas.
2. High Interest Rates = less housing construction = lower material prices
Increased cost of living = increased union wages and higher labor costs
Typical profit margin factored into the Construction Cost estimate
15-20% for smaller projects
10-15% for larger projects
5-10% for ver large projects
,Typical fees of Engineering Consultants (Struc., MEP, Civil)
Mechanical: 15%
Electrical: 12.5%
Civil: 10.5%
Structural: 9.4%
(% Construction Cost)
ENR 20 Cities Building Cost Index
Cost estimating with Parameter Costs can be adapted to a city by using ______ or adding an
inflation factor.
A Pro-forma is a financial analysis of the building project, showing costs and return on
investment.
This report is typically done by the client at the beginning of the project to determine if the
project will be profitable.
What is Pro-forma?
Who does it?
During what phase of the project is it typically done?
General Obligation Bond
Municipal bond issues when a state or local government wants to raise money for a
project.
Shareholders (investors) are guaranteed to be repaid using future tax revenues.
Revenue Bond
Type of municipal bond where the shareholders are promised payment from the revenue
collection of the project, such as tolls from a new bridge, instead of being repaid by future
tax revenue.
It is less secure than a General Obligation Bond and typically offer slightly higher interest
rates.
, (5) phases used by firms to help in cost estimating
1. Pre-planning/Proposal Phase: Cost is broken down by units, which would come from the
occupancy of the building.
2. Programming Phase: Function of spaces and unit costs come from similar buildings.
3. Schematic Design: Determines major elements in the building, such as number of
plumbing fixtures, electrical layout, structure, and mechanical systems.
4. Design Development: Defined materials like windows, doors, dropped ceilings, and
cabinets are added.
5. Construction Documents: Finishes are in place and should reflect the pre-bid cost
breakdowns.
Depreciation
Federal tax benefit given for the decrease in the value of assets over time.
Quantity and Quality (in regards to project budget)
Change in one will ultimately affect the other.
Sometimes these changes are negative, such as if the Owner decides to increase the
quantity of an item in the building and thus reduce the quality in order to keep the budget
intact.
