1. A construction company signed a contract for a project with 3-month duration. The payment arrangements are as follows

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1 A Construction Company Signed A Contract For A Project With 3 Month Duration The Payment Arrangements Are As Follows 1 (64.72 KiB) Viewed 42 times

1 A Construction Company Signed A Contract For A Project With 3 Month Duration The Payment Arrangements Are As Follows 2 (64.72 KiB) Viewed 42 times

1 A Construction Company Signed A Contract For A Project With 3 Month Duration The Payment Arrangements Are As Follows 3 (55.7 KiB) Viewed 42 times

1 A Construction Company Signed A Contract For A Project With 3 Month Duration The Payment Arrangements Are As Follows 4 (65.83 KiB) Viewed 42 times

1 A Construction Company Signed A Contract For A Project With 3 Month Duration The Payment Arrangements Are As Follows 5 (65.83 KiB) Viewed 42 times

1 A Construction Company Signed A Contract For A Project With 3 Month Duration The Payment Arrangements Are As Follows 6 (53.27 KiB) Viewed 42 times

1. A construction company signed a contract for a project with 3-month duration. The payment arrangements are as follows: Indirect costs are 20% of the direct costs • • The project's profit and general overhead are equal to 20% of the total costs The owner will pay the contractor 5% of the contract value as an advanced payment. The value of the advanced payment will be deducted from each bill (depending on the bill value, i.e. 5 % of the bill value) • The contractor bills the owner for the work performed during the month on the last day of the month. The owner pays one month after receiving the bill. The owner holds 10% retention of each bill. The retention is paid with the final payment. The construction company pays for labor and Equipment weekly. • The construction company pays the material suppliers in full when it receives payment from the owner. The construction company pays the subcontractors one month after receiving the bill, but withholds 10% retention. The retention is paid with the final payment. • Indirect cost is paid in full by the end of the month where it occurred (before receiving payment from owner). The following table shows the monthly costs as well as the amount billed to the owner. Determine the monthly cash flow by the end of each month and draw the cumulative cash out, cash in and net cash flows. What is the maximum amount of cash invested by the construction company?

H23 Construction Costs Bill to Owner Month Labor Materials Subcontractors Indirect Costs 8 9 Owner's Advance Payment With Respect to Owner's Payment 10 Owner's Payment of Progress Bills 11 Retention Withheld at Owner 12 Owner's Payment of Retention 13 Total Cash Received (Cash Inflow) (9+10+12) 14 15 Labor Materials 16 17 Contractor Disbursements Subcontractors 18 Indirect Costs Total (15+16+17+18) 20 Retention Withheld 21 Retention Payment 22 Total Payments (Cash Outflow) (19+21) Net Cash Flow (13-22) Subcontractors Subcontractors 0 0 1 30,000 25,000 60,000 Before After 2 50,000 60,000 125,000 Before After 3 75,000 85,000 100,000 Before After Before 4 After

1. A construction company signed a contract for a project with 3-month duration. The payment arrangements are as follows: • Indirect costs are 20% of the direct costs • The project's profit and general overhead are equal to 20% of the total costs The owner will pay the contractor 5% of the contract value as an advanced payment. The value of the advanced payment will be deducted from each bill (depending on the bill value, i.e. 5% of the bill value) • The contractor bills the owner for the work performed during the month on the last day of the month. The owner pays one month after receiving the bill. The owner holds 10% retention of each bill. The retention is paid with the final payment. • The construction company pays for labor and Equipment weekly. The construction company pays the material suppliers in full when it receives payment from the owner. • The construction company pays the subcontractors one month after receiving the bill, but withholds 10% retention. The retention is paid with the final payment. Indirect cost is paid in full by the end of the month where it occurred (before receiving payment from owner). The following table shows the monthly costs as well as the amount billed to the owner. Determine the monthly cash flow by the end of each month and draw the cumulative cash out, cash in and net cash flows. What is the maximum amount of cash invested by the construction company?

Construction Costs 6 Bill to Owner 7 Month Labor Materials Subcontractors Indirect Costs With Respect to Owner's Payment 8 9 Owner's Advance Payment 10 Owner's Payment of Progress Bills 11 Retention Withheld at Owner 12 Owner's Payment of Retention 13 Total Cash Received (Cash inflow) (9+10+12) 14 15 Labor Materials 16 17 Contractor Disbursements Subcontractors 18 Indirect Costs Total (15+16+17+18) Subcontractors Subcontractors 19 20 Retention Withheld 21 Retention Payment 22 Total Payments (Cash Outflow) (19+21) 23 24 Net Cash Flow (13-22) 0 0 1 30,000 25,000 60,000 Before After 2 50,000 60,000 125,000 3 75,000 85,000 100,000 4 Before After Before After Before After