A contractor anticipates his spending to be as shown in the 10-months project. Owner’s reimbursement lags by a month and owner retains 10% till the final and satisfactory completion of the project. Borrowing money cost the contractor 1% per month. The contractor will add a 5% profit to the total.
Calculate the cash flow, net cash flow, and cumulative cash flow
Calculate the cost of borrowing money, maximum debt, and total contract sum
Draw the cash flow diagrams
Use the calculation sheet as in the Cash-flow Excel file
Month
Spending
1
$1,500,000
2
$1,950,000
3
$2,600,000
4
$3,350,000
5
$3,760,000
6
$4,200,000
7
$2,890,000
8
$2,200,000
9
$1,670,000
10
$920,000
Total
$25,040,000
Problem 2. Do exercise #21, chapter 8 in the Scheduling book. Use the calculation sheet as in the Cost-Time Excel file.
Please note that an example is uploaded in module-2 as an excel file named Cash-flow example.