North Carolina Building Contractor License Practice Exam

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Prepare for the North Carolina Building Contractor License Exam. Explore detailed quizzes with explanations and challenging multiple-choice questions designed for you. Get ready for your licensing success!

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What would be the total amount of a project if a contractor made $38,000 representing a 25% profit?

$152,000
$152,500
$150,000
$160,000

The correct answer is: $152,000

To find the total amount of a project given a contractor's profit and the percentage that profit represents, you can set up the problem based on the relationship between profit and the total cost. In this case, the contractor made $38,000, which is stated to be a 25% profit. First, understand that if $38,000 represents 25% of the total amount, this can be expressed mathematically as: Profit = Total Amount × Profit Margin Here, you can express the profit in relation to the total amount. Rearranging the equation gives: Total Amount = Profit / Profit Margin Substituting the values given in the problem: Total Amount = $38,000 / 0.25 Now, calculate the total amount: Total Amount = $38,000 / 0.25 = $152,000 Thus, the total amount of the project is $152,000. This aligns with the answer choice identified, confirming that it is the correct calculation method and result. Understanding this concept reinforces the crucial relationship between cost, profit, and profit margins in project budgeting within the construction industry.