2. Table 2 shows a project budget as cost and profit. The conditions of the contract...
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2. Table 2 shows a project budget as cost and profit. The conditions of the contract allow interim measurements to be made bi-monthly and the payment of the amount certified less 10 % retention to be paid to the contractor one month later. Half of the retention is included in the final payement on the practical completion and the other half is released three month after practical completion. Determine the monthly net cash flows assuming an average delay of one month between the contractor incurring a cost liability and the outward cash flow. a. What is the maximum cash the contractor needs to spend from his pocket to execute this contract and when does he need? b. What is the total profit of the contractor without considering any interest? Table 2- Budget and profit distribution End of Month 2 3 4 6 7 8 Cost (S'000) 12.00 10.00 11.00 15.00 12.00 10.00 10.00 15.00 15.00 10.00 10.00 8.00 Profit (% of value) 2. Table 2 shows a project budget as cost and profit. The conditions of the contract allow interim measurements to be made bi-monthly and the payment of the amount certified less 10 % retention to be paid to the contractor one month later. Half of the retention is included in the final payement on the practical completion and the other half is released three month after practical completion. Determine the monthly net cash flows assuming an average delay of one month between the contractor incurring a cost liability and the outward cash flow. a. What is the maximum cash the contractor needs to spend from his pocket to execute this contract and when does he need? b. What is the total profit of the contractor without considering any interest? Table 2- Budget and profit distribution End of Month 2 3 4 6 7 8 Cost (S'000) 12.00 10.00 11.00 15.00 12.00 10.00 10.00 15.00 15.00 10.00 10.00 8.00 Profit (% of value)
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Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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