(a) Draw a graph showing the curve for the contractor's cash flow out, the curve for...

 

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(a) Draw a graph showing the curve for the contractor's cash flow out, the curve for the contractor's cash flow in, and the curve for the difference. Plot $ on the vertical axis and time on the horizontal axis. Show all calculations on a Excel spreadsheet. (b) Find the cash flow out, the contractor's cash flow in, and the difference, if owner's payments are delayed four weeks. Draw a graph of this situation and compare this with (a) above. (c) How much should the contractor's fee be adjusted for part (b) if the contractor's expected rate of return is 12% Contractor's Method of Payment: (all payments are at the end of week) Labor: Paid weekly Material: Materials purchased during the month are paid at the end of the first week of the next month. Spread labor and materials evenly over activity duration. Equipment: Pavement breaker - pay upon delivery. Concrete plant - 50% when ordered and 50% upon delivery. All other equipment spread over total activity duration. Monthly payments, paid in advance. (For detour, spread over total duration of "detour install" up to end of "detour remove") Fixed Overhead: This is a G&A item; not a project cash flow Variable Overhead: Labor paid at the end of each month, material same as above, and equipment paid at the end of the month. Subcontractors: Paid one week after the contractor receives his payment from the owner for the sub's work. No retainage is held on subcontractors. Owner's Method of Payment: (one payment per month) - Total quantities for the month for the unit priced items. - 50% of detour lump sum when detour install is finished and 50% when detour remove is finished. - 45% of lights lump sum when all wiring is finished and 55% when all lights are installed. -10% retention for pay items up to and including concrete topping, no retention thereafter. - Pay request submittal is made at the end of the month. Payment is due two weeks after submittal. Additional Information: - One week is equal to 5 working days, starting on Monday. - One month is equal to 20 working days. - Assume one year is equal to 48 weeks. Cash Flow Due: 5/31/21 With the work schedule given below, the project quantities and unit prices (table 1), the contractor cost per pay item (table 2): Detour Electric Install Install Wiring Lights Start Deliver Breaker Remove Install Place Detour End Paint Pavement Base Topping Remove Deliver Plant *Schedule Concrete Plant as late as possible Table 1: Pay Item Quantity Detour Unit 1 LS $/Unit $237,500.00 Remove Payment 30000 SY $15.30 Install Base 3500 CY $206.00 Place Topping Paint Lights 3500 CY $649.00 20000 LF $3.10 1 LS $826,000.00 Table 2: Cost Item Quantity Unit Material Equip. Labor Sub. Duration (days) Detour 1 EA $32,000 $80,000 $40,000 15 Install $32,000 8 Remove Concrete Plant 1 EA $220,000 (for topping) Pavement 1 EA $128,000 25 20 Breaker Remove 30000 SY $20,000 $100,000 $108,000 40 Pavement Install Base 3500 CY $40/CY $60/CY $40/CY 30 Concrete Topping 3500 CY $220/CY $80/CY $120/CY Electric Wiring 15000 LF $260,000 Install Lights 60 EA $380,000 20 Paint Pavement 20000 1 LF $0.60/LF $0.80/LF $1.00/LF B]t]g]g| 30 40 EA $140,000 -- Quality Control (1/2 base; 12 topping) Variable $400/day $320/day $1,080/day Overhead Fixed Overhead Fee $520,000 $262,200 (a) Draw a graph showing the curve for the contractor's cash flow out, the curve for the contractor's cash flow in, and the curve for the difference. Plot $ on the vertical axis and time on the horizontal axis. Show all calculations on a Excel spreadsheet. (b) Find the cash flow out, the contractor's cash flow in, and the difference, if owner's payments are delayed four weeks. Draw a graph of this situation and compare this with (a) above. (c) How much should the contractor's fee be adjusted for part (b) if the contractor's expected rate of return is 12% Contractor's Method of Payment: (all payments are at the end of week) Labor: Paid weekly Material: Materials purchased during the month are paid at the end of the first week of the next month. Spread labor and materials evenly over activity duration. Equipment: Pavement breaker - pay upon delivery. Concrete plant - 50% when ordered and 50% upon delivery. All other equipment spread over total activity duration. Monthly payments, paid in advance. (For detour, spread over total duration of "detour install" up to end of "detour remove") Fixed Overhead: This is a G&A item; not a project cash flow Variable Overhead: Labor paid at the end of each month, material same as above, and equipment paid at the end of the month. Subcontractors: Paid one week after the contractor receives his payment from the owner for the sub's work. No retainage is held on subcontractors. Owner's Method of Payment: (one payment per month) - Total quantities for the month for the unit priced items. - 50% of detour lump sum when detour install is finished and 50% when detour remove is finished. - 45% of lights lump sum when all wiring is finished and 55% when all lights are installed. -10% retention for pay items up to and including concrete topping, no retention thereafter. - Pay request submittal is made at the end of the month. Payment is due two weeks after submittal. Additional Information: - One week is equal to 5 working days, starting on Monday. - One month is equal to 20 working days. - Assume one year is equal to 48 weeks. Cash Flow Due: 5/31/21 With the work schedule given below, the project quantities and unit prices (table 1), the contractor cost per pay item (table 2): Detour Electric Install Install Wiring Lights Start Deliver Breaker Remove Install Place Detour End Paint Pavement Base Topping Remove Deliver Plant *Schedule Concrete Plant as late as possible Table 1: Pay Item Quantity Detour Unit 1 LS $/Unit $237,500.00 Remove Payment 30000 SY $15.30 Install Base 3500 CY $206.00 Place Topping Paint Lights 3500 CY $649.00 20000 LF $3.10 1 LS $826,000.00 Table 2: Cost Item Quantity Unit Material Equip. Labor Sub. Duration (days) Detour 1 EA $32,000 $80,000 $40,000 15 Install $32,000 8 Remove Concrete Plant 1 EA $220,000 (for topping) Pavement 1 EA $128,000 25 20 Breaker Remove 30000 SY $20,000 $100,000 $108,000 40 Pavement Install Base 3500 CY $40/CY $60/CY $40/CY 30 Concrete Topping 3500 CY $220/CY $80/CY $120/CY Electric Wiring 15000 LF $260,000 Install Lights 60 EA $380,000 20 Paint Pavement 20000 1 LF $0.60/LF $0.80/LF $1.00/LF B]t]g]g| 30 40 EA $140,000 -- Quality Control (1/2 base; 12 topping) Variable $400/day $320/day $1,080/day Overhead Fixed Overhead Fee $520,000 $262,200