A public works subcontract has $75,000 in progress payments. Under a 5 percent retention cap, what total retention would be withheld?
Correct Answer
A) $3,750.
Five percent of $75,000 is $3,750.
Why This Is the Correct Answer
Five percent of $75,000 is $3,750.
Why the Other Options Are Wrong
Option B: $11,250.
$11,250. is above the supported result for retention cap; it likely adds an unsupported amount or compares the wrong financial base.
Option C: $75,000.
$75,000. is above the supported result for retention cap; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $4,000.
$4,000. is above the supported result for retention cap; it likely adds an unsupported amount or compares the wrong financial base.
Memory Technique
Retention Cap drawer for Verifying Subcontract: label percent before counting dollars.
Reference Hint
Study anchor (closed-book): memorize Retention cap from California Code, Public Contract Code Sections 7107 and 7201. / California Code, Public Contract Code Section 7201; know the rule or calculation trigger without relying on exam-room lookup.
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