Reference no: EM132362395

Mrs. Adam and her husband, Tim, are planning their dream house. The land for the house sits high on a hill with a beautiful view of the nearby mountains. The plans for the house show the size of the house to be 300 square metres. The average price for a lot and house similar to this one has been $1500 per square metre. Fortunately, Tim is a retired plumber and feels he can save money by installing the plumbing himself. Mrs. Adam feels she can take care of the interior decorating.

The following average cost information is available from a local bank that makes loans to local contractors and disperses progress payments to contractors when specific tasks are verified as complete.

24%

Excavation and framing complete

8%

Roof and fireplace complete

3%

Wiring roughed in

4%

Plumbing roughed in

5%

Siding on

17%

Windows, insulation, walks, plaster and garage complete

9%

Electricians to install Fireplace/heating

6%

Plumbing fixtures installer

8%

Exterior paint, light fixtures installed, finish hardware installed

6%

Carpet and trim installed

5%

Interior decorating

5%

Floors laid and finished

Answer the following questions:

a. What is the estimated cost for the Adam's house if they use contractors to complete all of the house?

b. Estimate what the cost of the house would be if the Adams use their talents to do some of the work themselves.

c. The Adams are still not happy with the cost of building the dream house and they think that exterior paint, light fixtures and finish hardware installation as well as carpet and trim installation can be done by themselves. Find how much they can save by doing this by their own.