Final answer:
To calculate the budget for fringe benefits, the cost of supplies ($20,000) is subtracted from the total project budget ($200,000) to determine the PI's salary, which is then multiplied by the fringe benefit rate (25%). The budget for fringe benefits would be $45,000.
Step-by-step explanation:
The question involves calculating the budget for fringe benefits within a project that has a total cost limit of $200,000, where $20,000 is allocated for supplies, and the remainder goes to the Principal Investigator's (PI) salary. Given the institution's fringe benefit rate of 25%, we must first find the portion of the budget allocated to the PI's salary after accounting for the cost of supplies.
To do this, we subtract the cost of supplies from the total cost limit: $200,000 - $20,000 = $180,000 allocated to the PI's salary. Next, we apply the fringe benefit rate to the PI's salary to find the amount budgeted for fringe benefits:
Fringe benefits = PI's salary * fringe benefit rate = $180,000 * 0.25 = $45,000. Therefore, $45,000 will be budgeted for fringe benefits. Since this option is not available in the choices given, it may suggest there is a discrepancy in the premises or there's additional information required such as the inclusion of the Modified Total Direct Cost (MTDC) F&A rate that's not accounted for in this calculation.