ARE 5.0 (PJM/ PCM/ PA/ PPD/
PDD/ CE): PROJECT BUDGET/
FINANCIAL EXAM 2025 QUESTIONS
AND ANSWERS
Pro Forma - ....ANSWER ...-Projected financial statements of future values:
expected project generated income vs. expected project building costs.
- Developed in order to determine whether the project is likely to be financially
successful.
Bldg. cost factor - ....ANSWER ...-- *Scope (Project size)*
- *Quality*
- *Construction Cost*
Bldg. cost variable factors? - ....ANSWER ...-- *Quality*: quality level of materials/
systems/ construction
- Quantity
- Funds
- Time
- Location (urban/ rural): labor rates/ material prices/ transportation
....FOR STUDY PURPOSES...©️2025 ALL RIGHTS RESERVED... 1
,(One cannot be changed without changing one or more of the others)
Scope vs. Cost - ....ANSWER ...-- Perimeter-to-floor area = increase unit cost
- Floor-to-floor height = increase unit cost
- Taller bldg. = increase unit cost
Cost vs. Time - ....ANSWER ...-*Labor cost = 50% of construction cost*
- Longer schedule = increase construction/ labor cost
- Higher Labor cost = decrease Productivity
Method:
- shorten schedule: fast-track
- Increase off-site manufacturing = decrease on-site labor cost/ erection time
Quality vs. Life cycle - ....ANSWER ...-- Higher quality = higher initial cost =
higher efficient = longer life span
- Longer life span = lower operational cost = decrease maintenance/ replacement cost
(Architect sets) Project Budget based on _________ - ....ANSWER ...-*Scope*
Most realistic and accurate way to establish a preliminary budget, because it is based on
a specific building type of a defined size on a specific site.
Project Budget (Cost analysis) - ....ANSWER ...-The *sum* established by the
owner as available for the entire project on *hard cost & soft cost*
- *Influence design decision & project feasibility*
....FOR STUDY PURPOSES...©️2025 ALL RIGHTS RESERVED... 2
, Project Budget items - ....ANSWER ...-*Hard cost (A to F)*
(A) Building Costs: Area x $cost/ GSF
(B) Fixed Equipment: 5-30% of A
(C) Site Development: 5-30% of A
(D) *Total Construction (A+B+C) = Base Bid*
(E) Land Acquisition: per project
(F) Movable Equipment: 5-20% of A
*Soft cost (G to J)*
(G) Professional Fees: 5-10% of D
(H) Contingencies: 5-15% of D
(J) Administrative Fees: 1-2% of D
Hard Costs - ....ANSWER ...-Expenses directly associated with construction,
including materials, labor and contractors overhead and profit.
What's included in hard cost? - ....ANSWER ...-Hard cost expenses:
(A) *Bldg. cost*: GC's fee (overhead, profit)
(B) *Fixed Equipment*
(C) *Site development*: Demo, sitework, parking, landscape
(D) *Construction cost* (A+B+C): *Base Bid*
(E) *Land acquisition*: land purchase cost
....FOR STUDY PURPOSES...©️2025 ALL RIGHTS RESERVED... 3
PDD/ CE): PROJECT BUDGET/
FINANCIAL EXAM 2025 QUESTIONS
AND ANSWERS
Pro Forma - ....ANSWER ...-Projected financial statements of future values:
expected project generated income vs. expected project building costs.
- Developed in order to determine whether the project is likely to be financially
successful.
Bldg. cost factor - ....ANSWER ...-- *Scope (Project size)*
- *Quality*
- *Construction Cost*
Bldg. cost variable factors? - ....ANSWER ...-- *Quality*: quality level of materials/
systems/ construction
- Quantity
- Funds
- Time
- Location (urban/ rural): labor rates/ material prices/ transportation
....FOR STUDY PURPOSES...©️2025 ALL RIGHTS RESERVED... 1
,(One cannot be changed without changing one or more of the others)
Scope vs. Cost - ....ANSWER ...-- Perimeter-to-floor area = increase unit cost
- Floor-to-floor height = increase unit cost
- Taller bldg. = increase unit cost
Cost vs. Time - ....ANSWER ...-*Labor cost = 50% of construction cost*
- Longer schedule = increase construction/ labor cost
- Higher Labor cost = decrease Productivity
Method:
- shorten schedule: fast-track
- Increase off-site manufacturing = decrease on-site labor cost/ erection time
Quality vs. Life cycle - ....ANSWER ...-- Higher quality = higher initial cost =
higher efficient = longer life span
- Longer life span = lower operational cost = decrease maintenance/ replacement cost
(Architect sets) Project Budget based on _________ - ....ANSWER ...-*Scope*
Most realistic and accurate way to establish a preliminary budget, because it is based on
a specific building type of a defined size on a specific site.
Project Budget (Cost analysis) - ....ANSWER ...-The *sum* established by the
owner as available for the entire project on *hard cost & soft cost*
- *Influence design decision & project feasibility*
....FOR STUDY PURPOSES...©️2025 ALL RIGHTS RESERVED... 2
, Project Budget items - ....ANSWER ...-*Hard cost (A to F)*
(A) Building Costs: Area x $cost/ GSF
(B) Fixed Equipment: 5-30% of A
(C) Site Development: 5-30% of A
(D) *Total Construction (A+B+C) = Base Bid*
(E) Land Acquisition: per project
(F) Movable Equipment: 5-20% of A
*Soft cost (G to J)*
(G) Professional Fees: 5-10% of D
(H) Contingencies: 5-15% of D
(J) Administrative Fees: 1-2% of D
Hard Costs - ....ANSWER ...-Expenses directly associated with construction,
including materials, labor and contractors overhead and profit.
What's included in hard cost? - ....ANSWER ...-Hard cost expenses:
(A) *Bldg. cost*: GC's fee (overhead, profit)
(B) *Fixed Equipment*
(C) *Site development*: Demo, sitework, parking, landscape
(D) *Construction cost* (A+B+C): *Base Bid*
(E) *Land acquisition*: land purchase cost
....FOR STUDY PURPOSES...©️2025 ALL RIGHTS RESERVED... 3
