A construction project is carried out by a general contractor with the following descriptions: Project Duration: 3 months (Start:...

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A construction projectis carried out by a general contractor with the followingdescriptions:
Project Duration: 3 months(Start: May 1st; End: July 31st)
Contract Amount:20,713+30,081+50,630+40,978+60,886+70,089+30,500+100,165+152,181
Budget Amount:100,936+200,081+300,685
Contract Terms and Conditions
Materials: The constructioncompany pays material suppliers in full when it receives paymentfrom the owner. On the last day of each month the constructioncompany may bill the owner for the work completed during the month.The owner pays the monthly bills one month after they arereceived.
Labor: The construction companypays for labor on the 25th of each month.
Subcontractor: The constructioncompany pays subcontractors when it receives payment from the ownerbut withholds 5% from the subcontractor’s payment. Final paymentwill include payment of the retention.
Between the contractor and theowner: On the last day of each month the construction company maybill the owner for the work completed during the month. The ownerpays the monthly bills one month after they are received. The ownerwithholds 5% from the construction company's payment. Final paymentwill include payment of the retention.
Cost-loaded schedule and billingschedule to the owner
Month May June July
Cost-LoadedSchedule Materials 20,713 30,081 50,630
Labor 40,978 60,886 70,089
Subcontractor 30,500 100,165 152,181
Bill to Owner 100,936 200,081 300,685
What is the amount ofcash to maintain a positive cash flow in this project?

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4.1 Ratings (689 Votes)

Assumption 1 The contracting company bills the owner on 30th of the month and the owner receives the bill on the same day and therefore makes the payment on the 30th of the next month The key here is the labor payment which See Answer

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A construction projectis carried out by a general contractor with the followingdescriptions:Project Duration: 3 months(Start: May 1st; End: July 31st)Contract Amount:20,713+30,081+50,630+40,978+60,886+70,089+30,500+100,165+152,181Budget Amount:100,936+200,081+300,685Contract Terms and ConditionsMaterials: The constructioncompany pays material suppliers in full when it receives paymentfrom the owner. On the last day of each month the constructioncompany may bill the owner for the work completed during the month.The owner pays the monthly bills one month after they arereceived.Labor: The construction companypays for labor on the 25th of each month.Subcontractor: The constructioncompany pays subcontractors when it receives payment from the ownerbut withholds 5% from the subcontractor’s payment. Final paymentwill include payment of the retention.Between the contractor and theowner: On the last day of each month the construction company maybill the owner for the work completed during the month. The ownerpays the monthly bills one month after they are received. The ownerwithholds 5% from the construction company's payment. Final paymentwill include payment of the retention.Cost-loaded schedule and billingschedule to the ownerMonthMayJuneJulyCost-LoadedSchedule Materials20,71330,08150,630Labor40,97860,88670,089Subcontractor30,500100,165152,181Bill to Owner100,936200,081300,685What is the amount ofcash to maintain a positive cash flow in this project?

	Month	May	June	July
Cost-LoadedSchedule	Materials	20,713	30,081	50,630
	Labor	40,978	60,886	70,089
	Subcontractor	30,500	100,165	152,181
Bill to Owner		100,936	200,081	300,685