A replacement reserve of $350 per unit per year for a 24-unit building totals:
Correct Answer
B) $8,400 annually
Why this is correct: The annual replacement reserve is calculated per unit, then multiplied by the number of units. $350/unit/year × 24 units = $8,400/year. Why the other choices are wrong: "$350 annually for the property" is wrong because it applies the rate to only one unit, not the entire building. "$14,600 annually" is wrong; it's not a correct multiplication. "$4,200 annually at half the rate" is wrong; it incorrectly halves the rate or the unit count. Exam tip: Replacement reserves are per unit. Multiply the per-unit rate by the total number of units for the annual expense.
Why This Is the Correct Answer
Why this is correct: The annual replacement reserve is calculated per unit, then multiplied by the number of units. $350/unit/year × 24 units = $8,400/year. Why the other choices are wrong: "$350 annually for the property" is wrong because it applies the rate to only one unit, not the entire building. "$14,600 annually" is wrong; it's not a correct multiplication. "$4,200 annually at half the rate" is wrong; it incorrectly halves the rate or the unit count. Exam tip: Replacement reserves are per unit. Multiply the per-unit rate by the total number of units for the annual expense.
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