CMA Financial Acumen for Architects 3

Question 1

When preparing a project budget, 'soft costs' typically include all EXCEPT:

Accepted Answer

Structural steel and concrete

Answer

Structural steel and concrete are hard construction costs; soft costs encompass professional fees, permits, FF&E, financing, and similar non-construction expenses.

Question 2

An architect negotiates a not-to-exceed (NTE) hourly fee contract. The project is completed under budget. Which statement is TRUE?

Accepted Answer

The architect bills only actual hours up to the NTE cap

Answer

Under an NTE contract, the architect invoices actual hours worked at agreed rates, but may never exceed the stated cap.

Question 3

Value engineering (VE) is most effectively applied during which project phase to yield the greatest cost savings?

Accepted Answer

Schematic Design and Design Development

Answer

VE opportunities are greatest early in design, when changes cost little; each subsequent phase exponentially increases the cost of implementing changes.

Question 4

A CM at-risk's Guaranteed Maximum Price (GMP) typically includes all EXCEPT:

Accepted Answer

Design fees for the architect of record

Answer

The GMP covers construction costs; the architect of record's design fees are a separate contract between the owner and architect, outside the GMP.

Question 5

Depreciation in real estate is primarily relevant to an architect's financial analysis because it:

Accepted Answer

Provides tax benefits that affect owner ROI calculations

Answer

Depreciation allows owners to deduct building value over time, reducing taxable income and improving after-tax return on investment—a key metric in owner feasibility studies.

(CMA) Certified Master Architect Practice Test

(CMA) Certified Master Architect Practice Test

CMA Financial Acumen for Architects 3