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Proforma calculation

In a basic proforma equation to test the economic viability of a potential development project, the sum of hard costs and soft costs equals total cost, which will incorporate total interest on the construction loan. The total cost is figured into an annualized expense amount toward mortgage retirement. net income minus total expense equals profit (or percentage of equity). Which of the following would be considered in calculating "soft costs"? Choose 3
A. Legal expenses/accounting
B. Marketing fees
C. Cost of construction - Circulation areas (typ. 20%)
D. Architect/Engineer fee
E. Real estate taxes
F. Management office expense

AnswerA, B, D are soft costs. C is a hard cost (normally only construction cost and land acquisition). E, F are (operating) expenses.

ARE 4.0 exam prep: CDS

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