A construction project requires environmental impact assessment due to potential endangered species habitat. The assessment costs $28,000 and takes 120 days. If project delays cost $1,200 per day, what is the total environmental compliance cost?
Correct Answer
A) $172,000
Total cost includes assessment fee ($28,000) plus delay costs (120 days × $1,200 = $144,000) for a total of $172,000.
Why This Is the Correct Answer
The total environmental compliance cost must include both direct costs and indirect costs. The direct cost is the $28,000 assessment fee, while the indirect cost is the project delay expense of 120 days × $1,200 per day = $144,000. Adding these together gives the complete environmental compliance cost of $172,000, which represents the true total cost impact to the project.
Why the Other Options Are Wrong
Option C: $156,000
This amount doesn't correspond to any logical combination of the given costs and appears to be a distractor answer that might result from calculation errors.
Option D: $28,000
This represents only the delay costs (120 days × $1,200 = $144,000) but fails to include the actual assessment fee of $28,000, making it an incomplete calculation.
Memory Technique
Remember 'TOTAL = DIRECT + DELAY' - environmental costs always include both the study/assessment fees AND the time-related project delay costs
Reference Hint
Florida Building Code Chapter 1, Administrative provisions regarding environmental compliance requirements and project cost calculations
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