Answer Happy

Cash flow for construction company 1. The following table shows the monthly costs of work performed by a contractor. Month No. 1 2 3 4 5 6 Cost of Work Executed in Month (€000) 3.5 6.0 14.0 27.5 16.0 6.0 The contractor will add a contribution mark-up of 10% to the estimated cost of each item in the bill of quantities. The contract conditions allow for monthly measurements to be made and payment of the amount certified less 5% retention (up a maximum of €3000) is made one month later. Half of the retention is made on practical completion and the remaining half at the end of month twelve. There is a 1-month delay for monies received. a) Prepare graphs of cumulative cost and monies received to date against Time and show the cash flow per month in graphical format. b) What is the maximum amount of cash the contractor needs to execute this contract? When does the contractor require this amount? c) Calculate the net profit if interest is charged at 10% per annum on outstanding monies. ) (10 marks) (5 marks) (5 marks)