A contractor has earned $240,000 on a project, and the owner will hold 5% retention until release conditions are met. How much is currently retained?
- $12,000
- B$240,000
- C$5,000
- D$228,000
Why A is correct
The best answer is: $12,000. Retention is 5% of $240,000: $240,000 × 0.05 = $12,000. The contractor may have earned that amount but should not treat it as available cash until the contractual release requirements are met. The other values result from using the wrong base, operation, percentage, or cash-flow treatment.