A contractor discovers unforeseen rock excavation that will cost an additional $45,000. The change order includes 15% markup for overhead and profit. If the owner retains 10% on all work, what is the net payment to the contractor for this change order?
Correct Answer
A) $46,575
Cost with markup: $45,000 × 1.15 = $51,750. Net payment after 10% retainage: $51,750 × 0.90 = $46,575.
Why This Is the Correct Answer
Cost with markup: $45,000 × 1.15 = $51,750. Net payment after 10% retainage: $51,750 × 0.90 = $46,575.
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