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Cost Studies Examination MODULE CODE: 26-6017-00C 21st February 2015Duration: 3 hours & 10 minutes reading timeType: Closed Book ExaminationMarks: Total 100% Instructions to candidates You are allowed three hours to answer this question paper and additional 10 min given for readingYou are strongly advised to carefully read ALL the question requirements before attempting the question concerned (that is all parts and/or sub-questions). This examination is closed book examination and you are not allowed keep any unauthorized materials with you.The memory of any programmable/graphical calculator used during this examination must be cleared before the start of the paperALL answers must be written in the given answer booklet. Answers or notes written on the question paper will not be submitted for marking.The Question paper is of 6 PAGES comprising FIVE QUESTIONS. ANSWER ONLY FOUR QUESTIONS.Please do NOT start writing until told to do so by the Invigilator Please do NOT use red ink on the script answer bookThis Examination Carries 60% weight from the total marks for the module.

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Answer any FOUR Questions

Q1.

A cost planner will use different techniques to provide best value for the client budget during the design stage and construction stage.Define the following terms. (09 marks)

Cost limitCost targetsCost checking

Name and explain one Budget Setting Technique and one Budget Distributing Technique which can be used during the different stages of RIBA plan of work (08 marks)A client has defined her needs for a new city location for a 10-storey office building in terms of 1,260m2 of NRA (Net Rentable Area). The project will have air-conditioning, lifts, high-quality finish and no car parking. Prepare an estimate of the cost of the building, exclusive of external works, car parking and other allowances.

Add 20% GFA (Ground Floor Area) for circulation space, lift lobbies, public areas, plant rooms etc. (based on analysis of similar building)The present date cost per square metre of GFA for similar buildings has been assessed at 1,800. Add 10% for office buildings with higher standardsCalculate the present date cost of this project. (08 marks)

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Q2.

In preparing cost limit and/or outline cost plan, an allowance should be made for unforeseen difficulties, which may come to light later in the design process, and price rises between the preparation of the cost limit and the receipt of tender and between receipts of tender to the completion of project. They are as follows;Planning contingencyDesign contingencyContract contingencyEscalation to tender date

Explain each above contingencies and how they incorporate with budget calculation (08 marks)The percentage included for preliminaries is often considered in a cursory fashion, usually based on previous projects and an interpretation of information available on the project being cost planned.

Explain how the following factors influence the percentage allowed for the preliminaries: (08 marks)Location Space available on siteContract periodSecurity

An outline design of a simple office building has a floor area of 2,200m GFA (as measured from the Outline Proposal drawings).

The Brief Stage budget is 3,870,000. Allowances made for the contingencies as follows Planning contingency 3.0%Design contingency 3.8%Contract contingency 1.5%Escalation to tender date 1.0%Escalation during contract period 2.0%

Calculate the total cost to end of the project (09 marks)

Q3.

A developer is planning to invest in a Building project in Colombo area. He is planning to occupy the building for 20 years and a marketing consultant has given two options as follows.Option A

To purchase a newly constructed high rise apartment complex located in or around Colombo 03 targeting up-market clients for renting. The price of the apartment is 500 Mn and the developer can purchase 10 perch land next to the apartment to construct a recreational area from which he can increase the rent of the apartments. Price of land in Colombo 03 is approximately 1 Mn. Planning approval and condominium authority fees would amount to 3% of the purchasing cost for both apartment complex and land.The developer is going to construct the recreational area at the end of 05th year after purchasing and the estimated cost is 50Mn.Following information has given by the facilities Manager attached to the building.Annual Maintenance cost is 20MnAnnual energy cost is 25MnEvery 06 years, have to provide 15Mn for repairs in the building

At the end of 20 years the developer can resale the building to a value of 370Mn

Option B

To purchase a used shopping complex located in Athurugiriya area targeting up-market clients for renting at a price of 450Mn. Legal fees associated with the purchasing is 2% of the purchasing cost.Following information estimated by the Quantity Surveyor with Facilities Manager attached to the Developer.Annual Maintenance cost will be 15MnAnnual energy cost is 20MnEvery 05 years, have to provide 12Mn for repairs in the building

At the end of 20 years the developer has to demolish the building and the demolition cost is 50Mn. By selling the Steel frames, windows and other ancillaries during the demolition of the building, the income gain is 30Mn.You are hired by the developer to advise him regarding the suitable building to be invested, using the available information. However, the developer further mentioned that the income gain from both the buildings is almost similar. Clearly mention any assumptions you made. (Discounting rate 10%) (25 marks)

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Q4.

Value Management (VM) is defined as a systematic process of review and analysis of a project, during the concept and design phases, by a multidiscipline team of persons not involve in the project, that is conducted to provide recommendation for providing the needed functions safely, reliably, efficiently and at lowest overall cost improving the value and quality of the project and reducing the time to complete the project.State the minimum six reasons for the client commissioning value management. (6 marks)Explain the six phases of value management strategy. (12 marks)Prepare a Functional Analysis diagram for a bathroom. (7 marks)

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Q5.Identify the different sources and nature of published cost information and comment upon their usefulness in practice. (09 Marks)What precautions should be adopted before attempting to use existing cost information and applying this to new projects and new situations? (08 Marks)Briefly explain the common forms of Indices used in the construction industry to forecast the likely cost of a project? (08 Marks)

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