A contractor needs to obtain permits for a $750,000 commercial renovation. The permit fees include: Building permit ($5,200), Electrical permit ($850), Plumbing permit ($650), and Mechanical permit ($1,100). What is the total permit cost as a percentage of project value?
Correct Answer
C) 1.04%
Total permit costs: $5,200 + $850 + $650 + $1,100 = $7,800. Percentage of project value: ($7,800 ÷ $750,000) × 100 = 1.04%.
Why This Is the Correct Answer
Option B is correct because it accurately calculates the total permit costs and converts them to a percentage of project value. The calculation involves adding all four permit fees ($5,200 + $850 + $650 + $1,100 = $7,800), then dividing by the project value ($750,000) and multiplying by 100. This yields exactly 1.04%, which represents the proper relationship between permit costs and total project investment.
Why the Other Options Are Wrong
Option A: 0.89%
Option A (0.89%) is incorrect because it underestimates the percentage. This could result from either miscalculating the total permit fees or making an error in the division/percentage conversion process.
Option B: 1.15%
Option D (1.28%) is incorrect because it significantly overestimates the percentage. This could result from either inflating the total permit costs or errors in the mathematical conversion to percentage form.
Memory Technique
Remember 'BEPM' for the four main permit types: Building, Electrical, Plumbing, Mechanical. Typical permit costs run 1-2% of project value for commercial work.
Reference Hint
Florida Building Code Administrative Chapter, Section on Permit Fees and Fee Schedules
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