Managment of Cash Flow

CASH
FLOW
MANAGEMENT
CONSTRUCTION PROJECTS
IN
Contents
Abstract........................................................................................................................................................ 5
Introduction ................................................................................................................................................. 6
Type of Contracts........................................................................................................................................ 6
Analyzing of the cash flow .......................................................................................................................... 7
Determination of the required funding. .................................................................................................... 9
Reducing of the required funding............................................................................................................ 10
Risk Factor ................................................................................................................................................ 15
Effect of risk on the cash flow .................................................................................................................. 16
Expected Monetary Value (EMV) ........................................................................................................... 17
List of references
Bibliography
Acknowledgment
Appendix I
Page 2
List of Figures
Figure 1a: Cash flow in & Out For Reimbursable & (T&M) Contract .......................................... 8
Figure 1b: Cash flow in & Out For Lump sum Contract ................................................................ 8
Figure 2: Workshop Factory ..........................................................Error! Bookmark not defined.
Figure 3: Cash Flow In&Out for Scenario "A" .............................Error! Bookmark not defined.
Figure 4: Cash Flow In&Out for Scenario "C" ............................................................................. 12
Figure 5: Cash Flow In&Out for Scenario "B" ............................................................................. 12
Page 3
List of Tables
Table 1: Payment Schedule for Workshop Factory....................................................................................... 9
Table 2: Cash In & Out for Scenario "A" ................................................................................................... 11
Table 3: Cash In & Out for Scenario "B" ................................................................................................... 11
Table 4:Cash In & Out for Scenario "C" .................................................................................................... 11
Page 4
Abstract
The cash flow is a major factor should be considered during the process of developing the project
execution management plan. The importance of cash flow management is in determining the
required amount of money to be funded by the contractor and also the time when this money will
be required. The payment method by which the contractor will receive his money from the client
is a key item in the analysis of cash flow and it should be determined in the contract. Actually it
depends on the type of contract if it is lump sum or reimbursed contract. Another key item
should be considered in the cash flow analysis is the risk, whether it is an opportunity or a threat,
especially the one which is related to the procurement procedures, in order to determine the time
for purchasing the required material, mainly for the long lead items. The purpose of this study is
describing a simple way to develop more than one scenario for the execution plan and how to
compare between these scenarios to decide the best scenario which will obtain the maximum
benefit for the contractor with a minimum required funding.
Page 5
Introduction
The ability of developing alternate scenarios for the project execution plan requires a very
experienced team to study the type of contracts, payment method, procurement procedures and
risk with any other factors to analyze the cash liquidity and the required funding for each
scenario then decide the best scenario to execute the project.
Types of Contracts
Type of contracts is an important item in the management procedures of the construction
projects. This importance comes from determination of the payment method which the contractor
will be reimbursed for his completed works and how the final contract amount will be calculated.
There are three main types of contracts can be used:
1. Fixed Price Contract (Lump Sum )
In this type of contract the total value of work is known before signing the contract and the
contractor will be entitled for invoices according to agreed payment schedule created against the
completion of a certain work stage.
The contractor abides to complete the whole required works within the contract against the
agreed amount so he will take the full responsibility of risk except for the force majeure.
There are three different ways can be used to formulate this type of contract.3
1.1. Firm Fixed Price contract.
1.2. Fixed price with incentive fee.
1.3. Fixed price with economic adjusted price.
2. Reimbursable Contract.
In this type of contract the total amount of contract will be known after completing the works
and measuring the actual quantities and determining the actual cost. The contractor will be
reimbursed periodically or after a certain percentage of completion.
In this type of the owner take the responsibility of the risk.
Page 6
There are three different ways can be used to formulate this type of contract.3
2.1. Cost plus Fixed Fee contract.
2.2. Cost plus Incentive Fee.
2.3. Cost plus Award Fee.
3. Time and Material Contract (T&M) or Remeasured Contract.
This contract is a mix between the lump sum contract and reimbursable contract where the actual
rate for the works is known but the actual quantity is unknown. So the contractor will be entitled
for payments by measuring the actual completed quantity and calculate the cost according the
agreed rate for each item.
In this type of contract the risk responsibility will be shered between the owner and contractor
Analyzing of the cash flow
The cash flow in reimbursable and (T&M) contract the cash-in will be almost parallel to the
cash-out with a difference equal to the profit. But in the lump sum contract there is a difference
in the nature between the cash in and cash out curves. This difference need to be analyzed by the
contractor in order to manage the liquidity of the money and to determine the required funding
for the project at the start and during the project life time. See fig 1a & 1b.
The difference between the cash in and cash out curves in the hatched areas at fig1b shows the
amount of the funding required to be covered by the contractor and when it will be required.
It is the contractors challenge to reduce the amount of hatched area without causing any delay
for the project.
Page 7
100.00%
90.00%
At the end of each month the contractor will

be reimbursed according to this curve after
checking the actual % of the Completion.
80.00%
70.00%
60.00%
50.00%
Acumilative Cash out
40.00%
Acumilative Cash In
30.00%
20.00%
10.00%
0.00%
0
10
11
12
Months
Figure 1 a: Cash Flow for Reimbursable Contract & (T&M)
120.00%
100.00%
The Contractor will finish the project

according to this S-Curve
80.00%
The Contractor will

receive his payment
according to this
schedule
60.00%
40.00%
20.00%
Acumilative Cash In
0.00%
0
Months
Figure 1b: Cash flow in & Out For Lump sum Contract
Page 8
10
11
12
Determination of the required funding.

Table 1 shows a payment schedule for a lump sum contract to construct a new factory Consists
of three buildings B1-the main workshop, B2- Guard Room and B3- Generator room with
landscaping (Hard & Soft) for the surrounding area including services with a chain link boundary
as shown in fig 2.
B1
B3
B2
Figure 2: Workshop Factory
No.
Description
Advance Payment upon contract signing against bank guarantee.
10%
After concrete works completion
10%
After Steel Work Completion
10%
After Block works, Thermal & Moisture protection completion.
10%
After Doors & Windows installation
10%
After plaster & Finishing Works.
10%
After MEP Works
10%
After Landscaping Works
10%
After getting government authorities approval
10%
10
Final Handing Over
10%
Total
100%
Table 1: Payment Schedule for Workshop Factory
The total duration for the contract is 12 months from the start date. The total contract amount is
7,500,736.5$.
Page 9
In order to determine the required funding for this project the contractor has to go through the
following procedures:
1. Define precisely the required scope of works according to drawings, specifications, contract
and all related documents.
2. The result from the previous procedure is the WBS Work Break Down Structure
3. By analyzing the WBS the contractor will have the list of activities and can start the
estimation of cost and time required to finish each activity.
4. Assume the relationship between activities. Then develop the project time schedule and
budget (S-Curve) accordingly.
5. Draw the s-Curve and the payment schedule on the same curve in order to determine the
required funding for the project.
6. The result should be something like the chart in fig1b.
Reducing of the required funding.
To reduce the required funding the contractor will need to develop more than one scenario then
compare between the cash flow in & out for each of them. There are many methods to develop
these alternative scenarios some of them are
-
Resource leveling by moving the non critical activity within the float in order to reduce
the overtime expenses.
Adjust the schedule for the subcontractor and supplier payments.
Study the schedule of procurement taking into consideration all risk which will be
associated with it (some item may not be available later or the risk related to the long
lead item).
Negotiate the payment schedule with the owner.
The following tables No2, 3&4 shows the cash in and out for three different scenarios which
have been developed for the above mentioned project.
Page 10
Duration
10
11
12
Cash out
0%
10%
3%
1%
18%
3%
4%
9%
14%
11%
12%
10%
5%
Cash in
10%
0%
0%
10%
0%
0%
10%
10%
10%
0%
0%
20%
30%
Difference
10%
-10%
-3%
9%
-18%
-3%
6%
1%
-4%
-11%
-12%
10%
25%
(Months)
Table 2: Cash In & Out for Scenario "A"
Duration
10
11
12
Cash out
0%
12%
2%
4%
18%
2%
4%
11%
12%
10%
12%
9%
4%
Cash in
10%
0%
0%
10%
0%
0%
10%
10%
10%
0%
0%
30%
20%
Difference
10%
-12%
-2%
6%
-18%
-2%
6%
-1%
-2%
-10%
-12%
21%
16%
(Months)
Table 3: Cash In & Out for Scenario "B"
Duration
10
11
12
Cash out
0%
5%
2%
2%
16%
3%
5%
10%
17%
11%
13%
9%
5%
Cash in
10%
0%
0%
10%
0%
0%
10%
10%
10%
0%
0%
30%
20%
Difference
10%
-5%
-2%
8%
-16%
-3%
5%
0%
-7%
-11%
-13%
21%
15%
(Months)
Table 4:Cash In & Out for Scenario "C"
The following Curves show the difference between cash in & out for each scenario.
SCENARIO "A"
8,000,000.00
Acumilative Cash In
7,000,000.00
6,000,000.00
5,000,000.00
4,000,000.00
3,000,000.00
2,000,000.00
1,000,000.00
0
Figure 3: Cash Flow In-Out for Scenario "A"

Page 11
10
11
12
8,000,000.00
SCENARIO "B"
7,000,000.00
6,000,000.00
5,000,000.00
4,000,000.00
3,000,000.00
2,000,000.00
1,000,000.00
0
10
11
12
Figure 4: Cash Flow In-Out for Scenario "B"
8,000,000.00
SCENARIO "C"
7,000,000.00
6,000,000.00
5,000,000.00
4,000,000.00
3,000,000.00
2,000,000.00
1,000,000.00
0
10
11
12
Figure 5: Cash Flow In-Out for Scenario "C"
Appendix (I) shows the detailed calculation for each scenario.

Another point should be considered in the analysis process for these scenarios which is the time
money relationships.
Page 12
In order to do this the evaluation should be done after equalizing the three scenarios using one of
the following methods.
-
Net Present Value (NPV):
The first step is to calculate the difference between each scenario and the payment schedule as
shown in the previous tables then calculate the net present value for each scenario in this project
assume the interest rate is 10% annually according to the following equation:
NPV = =0 F(P/F, i, n)
NPV :
Net Present Value
Future Value
Interest rate
No of months
(P/F,i,n) : To convert the future value to the present value, notice that it should be divided by 12
to be monthly.
NPV ScenarionA = -70,597.92 $
NPV ScenarionB = -85,490.21 $
NPV ScenarionC = -48,391.45 $
Very important here that the negative value of the NPV for the three scenarios does not mean
that the contractor will not gain any profit but because we are using the same bill of quantity
prices as it is in the cash in and cash out and these prices including the overhead and profit so the
negative value means that due to the time money relationship the profit of the project will be
decreased by these negative amounts in case of transfer it to the net present value.
From the above we can see that scenario C has the minimum deduction so it will give the
contractor the maximum benefit. Refer to Appendix (I) for the detailed calculation.
-
Net Future Value (NFV):
Page 13
The same calculation can be made by transferring the present value to the future value using the
following equation with the same interest rate which is 10% annually:
NFV = =0 P(F/P, i, n)
NFV
Net Future Value
Present Value
Interest rate
No of months
(F/P,i,n)
: To convert the present value to the future value , notice that it should be
divided by 12 to be monthly.
NFV ScenarionA = -77,990.44 $
NFV ScenarionB = -94,442.15 $
NFV ScenarionC = -53,458.67 $
Same point that the negative value does not mean that the project has no profit.
From the above we can see that scenario C has the minimum deduction also so it will give the
contractor the maximum benefit. Refer to Appendix (I) for the detailed calculation.
-
Time To Money Factor (M):
Once these scenarios are for the same project and correspondingly the same interest rate the
calculation can be simplified by just calculate the M factor for each scenario where
M = Diff n
M
=0
Scenario factor
Diff
= (Cash in Cash out) for each month
Number of months
But the value of M factor should be used for comparing purpose only because it does not have
physical meaning like NPV or NFV.
Page 14
Notice that the time and money relationship is a reverse order relationship that is mean the value
of amount of money today is more than the Value of the same amount of money after a month or
year or any period so the bigger M factor will be for the last cash that is mean we should select
the minimum value of M factor.
M scenario
.1*0
.1*1-.03*2+.09*3-.18*4-.03*5+.06*6+.01*7-.04*8-.11*9-
.12*10+.1*11+.25*12 = 123%
M scenario A =123*7,500,736.5/100 = 9,224,918.20
M scenario
.1*0-.12*1-.02*2+.06*3-.18*4-.02*5+.06*6-.01*7-.02*8-.1*9-
.12*10+.21*11+.16*12 = 148%
M scenario B =148 *7,500,736.5/100 = 11,079,827.15
M scenario
.1*0-.05*1-.02*2+.08*3-.16*4-.03*5+.05*6+0*7-.07*8-.11*9-
.13*10+.21*11+.15*12 = 85%
M scenario C =85*7,500,736.5/100 = 6,411,656.95
From the above calculation we can see that scenario C has the Minimum value for M factor so it
will give the contractor the maximum profit.
Risk Factor
Risk is another big challenge should be considered during development of the execution plans.
The risk is not always a threat (Negative) but some time it may be opportunity (Positive) and the
role of contractor is to study all possible risk and develop a plan to increase the probability and
impact of the positive risk and mitigates the probability and impact of the negative risk.
The risk can be divided into two main categories:
-
External Risk which is coming from factors out of the contractors control like
(Hurricanes, price changes due to market condition...Etc).
Internal risk which is coming from factors under the contractors control (personal errors,
cost overrun due to changesetc).
Page 15
In order to develop a risk management plan the contractor has to go through the following steps:
Identification of risk
The objective from this procedure is to gather the information about all the expected risks
and this could be done by project team experience, the recorded lessons learned from the
previous projects, brainstorming sessions, the market conditions and many other methods.
The result will be a risk list contains the description of each risk and the affected activities by
each one.
-
Risk Assessment
Here the contractor should analyze each risk separately. Analyzing should be quantitative and
qualitative.
Quantitative analysis is to study the impact of the risk on the project and qualitative is to study
the probability of the risk to be occurred.
-
Risk Management plan.
Establish the procedure to mitigate the effect of negative risks and increase the effect of positive
risk and determine the authorized person to perform these procedures and follow up the risk
situation.
Effect of risk on the cash flow
The previous analysis for the three different scenarios in the workshop factory project did not
consider the effect of expected risks in order to do this we have to determine the effect of each
risk on the project budget then apply the time money relationship to see the effect of this risk on
the net cash flow.
Page 16
In scenario A the cost of steel works was distributed as 25% at the first months then 50% at the
fourth month finally 25% at the eighth month.
In scenario C the cost of steel works was distributed as 10% at the first months then 50% at the
fourth month finally 40% at the eighth month.
But during negotiation with the steel subcontractor the deal was for scenario A the cost will not
be increased but if we will go for scenario C the cost should be increased by 5% that is beacuse
scenario A will allow the subcontractor to buy the most of material in advance but in scenario C
the subcontractor has to divide the purchasing into two orders one in advance and one after three
months and the cost of the material may be increased according to the market condition.
The final deal with the subcontractor is the main contractor can go for the scenario C but the
increasing of cost will not be considered unless the cost of raw material is already occurred.
After studying the probability of increasing the raw material cost according to the market
condition the result is 35%.
So the contractor now has to study the effect of this risk by the following procedure.
Expected Monetary Value (EMV)
EMV is a technique calculates the average outcome for a certain future event that may or may
not occurs.
EMV = Probability percentage % * cost effect of the risk.
In the mentioned scenario the probability of risk to be occurred is 35%.
The effect of risk will be adding 5% on the total cost of the steel works which is =
.05*1,650,460=82,523$.....Refer to (Appendix I)
Expected Monetary Value (EMV) = Probability % * cost effect.
EMV = 0.35* 82,523 = 28,883.05$
This additional cost should be distributed on two payments at 4th months and 8th months equally.
Page 17
So in case of considering this risk there are another two values should be considered during
calculation of NPV & NFV , because it additional cost on the contractor these value will be a
negative values (Cash out).
For the payment at 4th month = (-28,883.05*.5) * .9673 =- 13,969.3$
For the payment at 8th month = (-28,883.05*.5) * .9357 =- 13,152.9$
The total value = - 27,122.2$
The Modified NPV ScenarionC = -48,391.45 27,122.2 = - 75,513.65 QR
From the previous calculation the NPV ScenarionA = -70,597.92 QR
So in this case it is better to execute according to scenario A.
The same if we calculating it for the NFV
For the payment at 4th month = (-28,883.05*.5) * 1.0686 =- 15,432.2QR
For the payment at 8th month = (-28,883.05*.5) *1.0337 =- 14928.2QR
The total value = - 30,360.4QR
The Modified NFV ScenarionC = -53,458.67 - 30,360.4 = -83,819.07 QR
From the previous calculation the NFV ScenarionA = -77,990.44 QR
So in this case it is better to execute according to scenario A.
As we check it using the M factor also the effect of this risk will be
M for payment after 4 months = -28,883.05*.5*4 = -57,766.1
M for payment after 8 months = -28,883.05*.5*8 = -115,532.2
The Modified M factor for Scenario C = 11,079,827.15 57,766.1-115,532.2 = 10,958,518.85
So the modified M factor for Scenario C is bigger than M factor for Scenario A which is =
9,224,918.20
The result is the same as NPV and NFV that scenario A will give the contractor the best benefit.
From the above calculation, it is clear that the risk is a very important factor and has significant
effect on the project cash flow. This effect makes the study and analysis of expected risk is a
Page 18
vital and essential process and it should be done by an expert team in order to assure the success
of completing project on time with the required quality and maximum profit.
Page 19
List of References
1. AACE International. Economic Analysis. Skills and Knowledge of Cost Engineering
5th edition. 2004.
2. Sullivan, William. Bontadelli, James. Wicks, Elin. Chapter 5 Comparing Alternatives.
Engineering Economy 11th edition.2000.
3. Project Management Institute (PMI) USA. PMBOK-Guide 4th edition. 2008.
Page 20
Bibliography
EMV: Expected monetary value
I: Interest Rate
N: Number of time periods
NFV: Net Future Value
NPV: Net Present Value.
Page 21
Acknowledgment
This paper would not have been possible without the great support from my superiors. In this
regard I am grateful to the following for their review and helpful suggestion:
- Eng M. Hendy, Head of Technical Department at James cubit & Partner Consultancy (Qatar).
- Eng M. Al-Gendy, Projects Manager at James cubit & Partner Consultancy (Qatar).
- Eng Elham Amer, Project Manager at Al-Goman Contracting (Qatar).
Last but not least, I am thankful to my wife for her understanding and continuing support which
saw me through the extended hours
Page 22
APPENDIX I
Page 23
WORKSHOPFACTORY
Cost Estimate for The Wrokshop Factory
BILL NO. - DESCRIPTION
Amount (Qatari
Riyal)
% Of Total
BILL NO.01 - PRELIMINARY
618,051
Amount
8%
BILL NO.02 - EARTH WORK
52,480
1%
BILL NO.03 - CONCRETE WORK
405,735
5%
BILL NO.04 - STEEL STRUCTURE
1,650,460
22%
307,575
4%
62,400
1%
BILL NO.05 - BLOCK WORK

BILL NO.06 - W.PROOFING & THERMAL
PROTECTION
BILL NO.07 - DOORS & WINDOWS
378,798
5%
BILL NO.08 - PLASTER & FINSHING
724,349.5
10%
BILL NO.09 - PAINTING
119,015
2%
10 BILL NO.10 - LANDSCAPING
1,170,100
16%
11 BILL NO.11 - EQUPMENT
48,565
1%
12 BILL NO.12 - MECHANICAL (HVAC)
126,450
2%
13 BILL NO.13 - PLUMPING & DRAINAGE
687,162
9%
1,149,596
15%
7,500,736.5
100%
14 BILL NO.14 - ELECTRICAL

TOTAL
1/1
WorkshopFactory
Senarion "A"
Month
10
11
12
51504
51504
51504
51504
51504
51504
51504
51504
51504
51504
51504
51504
52480
202868
412615
Total
618,051
52,480
202868
405,735
825230
412615

BILL NO.06 - W.PROOFING &
102525
102525
1,650,460
102525
307,575
62400
BILL NO.07 - DOORS & WINDOWS
189399
144870
144870
144870
62,400
113639
75760
378,798
144870
144870
724,350
119015
BILL NO.10 - LANDSCAPING

BILL NO.11 - EQUPMENT
292525
292525
31613
119,015
292525
292525
48565
48,565
BILL NO.12 - MECHANICAL (HVAC)

BILL NO.13 - PLUMPING &
137432
BILL NO.14 - ELECTRICAL
459838
Total Cash out / month

0
0
719467
719467
254372
973839
51504
1025343
1336573
2361915
Month
Entiteled Payemtn / Month
10%
1,170,100
202594
2564510
291462
2855971
31613
31613
31613
126,450
137432
137432
137432
68716
68716
687,162
229919
114960
114960
114960
114960
1,149,596
697863
3553835
1082393
4636227
835304
5471531
936842
6408373
748335
7156707
10
344029
7500737
7,500,737
Payment Schedule for Senario "A"

5
10%
10%
10%
10%
11
12
Total
20%
30%
100%
7,500,737
Amount
Acumilative Cash In
750,074
750,074
750,074
750,074
750,074
1,500,147
1,500,147
1,500,147
750,074
2,250,221
750,074
3,000,295
750,074
3,750,368
3,750,368
3,750,368
1,500,147
5,250,516
2,250,221
7,500,737
Diff = Monthlu Cash in - Monthly cash
750,074
719,467-
254,372-
698,569
1,336,573-
202,594-
458,612
52,210
332,319-
835,304-
936,842-
751,813
1,906,192
0.951426524
0.943563494
436,335.62
49,263.83
1.051053313
1.042366922
482,025.66
54,422.39
Summision
(P/F , I ,n)
NPV = (P/F , I , n) * Diff
750,073.65
(F/P,I,n)
0.991735537 0.983539376 0.975410951

(713,520.74) (250,184.63)
1.104713067 1.095583207 1.086528801 1.077549224
NFV = (F/P , I ,n)* Diff
828,616.16
(788,235.69) (276,382.23)
(P/F , I ,n) =1 / (1+i)^n
I = .1/12
(F/P , I ,n) = (1+i)^n
I = .1/12
0.967349704
681,392.24 (1,292,933.16)
1.068643858
752,742.91 (1,428,320.15)
0.959355078
(194,359.82)
1.059812091
(214,711.84)
1/1
0.935765449
(310,972.64)
1.03375232
(343,535.54)
0.92803185
(775,188.39)
1.025208912
(856,360.75)
0.920362166
(862,233.79)
1.016736111
(952,520.94)
0.912755867
686,221.50
1.008333333
758,077.86
0.90521243
1,725,508.42
1
1,906,191.70
0.00
Summision
(70,597.92)
Summision
(77,990.44)
NAFFCO(QATARFACTORY)
WorkshopFactory
Senarion "B"
Month
10
11
12
51504
51504
51504
51504
51504
51504
51504
51504
51504
51504
51504
51504
52480
135245
135245
135245
660184
Total
618,051
52,480
405,735
660184

BILL NO.06 - W.PROOFING & THERMAL
BILL NO.07PROTECTION
- DOORS & WINDOWS
76894
165046
76894
76894
165046
1,650,460
76894
307,575
62400
62,400
189399
144870
144870
144870
151519
37880
378,798
144870
144870
724,350
119015

234020
234020
234020
31613
31613
31613
119,015
234020
234020
48565
BILL NO.12 - MECHANICAL (HVAC)
48,565
31613
BILL NO.13 - PLUMPING & DRAINAGE
137432
574798
1,170,100
126,450
137432
137432
137432
68716
68716
687,162
114960
114960
114960
114960
114960
1,149,596
TOTAL
899413
186749
263643
1363380
128398
314395
834824
879445
776799
916217
651950
285524
Acumilative
899413
1086163
1349806
2713186
2841584
3155979
3990803
4870247
5647046
6563263
7215212
7500737
Month
10
10%
7,500,737
Payment Schedule for Senario "B"

5
10%
10%
10%
10%
11
12
Total
30%
20%
100%
7,500,737
Amount
750,074
750,074
750,074
750,074
750,074
2,250,221
1,500,147
Acumilative
750,074
750,074
750,074
1,500,147
1,500,147
1,500,147
2,250,221
3,000,295
3,750,368
3,750,368
3,750,368
6,000,589
7,500,737
Diff = Monthlu Cash in - Monthly cash out
750,074
899,413-
186,749-
486,431
1,363,380-
128,398-
435,678
84,750-
129,371-
776,799-
916,217-
1,598,271
1,214,623
Summision
(P/F , I ,n)
0.991735537 0.983539376 0.975410951
0.967349704
0.959355078
0.951426524
0.943563494
0.920362166
0.912755867
0.90521243
Summision
750073.65
-891980.0826 -183675.241
-1318865.239 -123179.2733
414515.8428
-79967.00616 -121060.9119 -720893.8885 -843251.1401
1458831.414
1099491.882
-85490.20976
1.10471307
1.095583207 1.086528801 1.077549224
(F/P,I,n)
828616.163 -985382.0532 -202908.439
(P/F , I ,n) =1 / (1+i)^n
I = .1/12
(F/P , I ,n) = (1+i)^n
I = .1/12
474469.783
524152.9694
1.068643858
0.935765449
1.059812091
1.051053313
1.042366922
1.016736111
1.008333333
Summision
-1456967.664 -136077.7529
457921.0682
-88340.59667 -133737.5713 -796380.8988 -931550.5537
1611590.127
1214623.05
-94442.15186
1/1
1.03375232
0.92803185
0.00
1.025208912
WorkshopFactory
Month
BILL NO.03 - CONCRETE
O - STEEL
BILL NO.04
S
BILL NO.05 - C
BLOCK WORK
1
51504
52480
135245
165046
2
51504
3
51504
135245
135245
Senarion "C"
5
6
51504
51504
4
51504
7
51504
825230
8
51504
9
51504
10
51504
11
51504
37880
144870
292525
151519
144870
119015
292525
31613
137432
114960
31613
68716
114960
12
51504
660184
153788
153788
BILL NO.06 - W.PROOFING &

C O&
BILL NO.07 - O
DOORS
S
BILL NO.08 - O
PLASTER
&
S
G
62400
189399
144870

BILL NO.12 - MECHANICAL
( - PLUMPING
C)
BILL NO.13
&
G
144870
144870
292525
292525
48565
137432
344879
31613
137432
229919
31613
137432
229919
68716
114960
TOTAL
404275
186749
186749
1221613
205292
391289
784737
1255522
835304
974722
710455
344029
Acumilative
404275
591025
777774
1999387
2204679
2595968
3380705
4636227
5471531
6446253
7156707
7500737
Month
%
0
10%
3
10%
8
10%
10
11
30%
12
20%
Payment Schedule for Senario "C"

5
6
7
10%
10%
Amount
750,074
750,074
750,074
750,074
750,074
2,250,221
1,500,147
Acumilative
750,074
750,074
750,074
1,500,147
1,500,147
1,500,147
2,250,221
3,000,295
3,750,368
3,750,368
3,750,368
6,000,589
7,500,737
Diff = Monthlu Cash in -
750,074
404,275-
186,749-
563,324
1,221,613-
205,292-
358,785
34,664-
505,449-
835,304-
974,722-
1,539,766
1,156,118
(P/F , I ,n)
1
750073.65
(F/P,I,n)
1.10471307 1.09558321 1.0865288

828616.163 -442917.18 -202908.44
Total
618,051
52,480
405,735
1,650,460
307,575
62,400
378,798
724,350
119,015
1,170,100
48,565
126,450
687,162
1,149,596
7,500,737
Total
100%
7,500,737
Summision
0.00
0.99173554 0.98353938 0.97541095 0.967349704 0.95935508 0.95142652 0.943563494 0.935765449 0.92803185 0.92036217 0.912755867 0.90521243 Summision
-400934.13 -183675.24 549472.789 -1181727.022 -196947.683 341357.09 -32707.3075 -472981.3362 -775188.39 -897096.929 1405430.632 1046532.429 -48391.452
(P/F , I ,n) =1 / (1+i)^n
I = .1/12
(F/P , I ,n) = (1+i)^n
I = .1/12
1.07754922 1.068643858 1.05981209 1.05105331 1.042366922 1.03375232 1.02520891

607009.77 -1305469.283 -217570.679 377101.637
-36132.19 -522508.6627 -856360.75
1/1
1.01673611
-991034.7
1.008333333
1552597.585
1
1156118.05
Summision
-53458.669

Managment of Cash Flow

Transféré par

Informations du document

Description originale:

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Managment of Cash Flow

Transféré par

Droits d'auteur :

Formats disponibles

CASH

At the end of each month the contractor will

Acumilative Cash out

Figure 1 a: Cash Flow for Reimbursable Contract & (T&M)

The Contractor will finish the project

The Contractor will

Determination of the required funding.

Figure 2: Workshop Factory

Advance Payment upon contract signing against bank guarantee.

After concrete works completion

After Steel Work Completion

After Block works, Thermal & Moisture protection completion.

After Doors & Windows installation

After plaster & Finishing Works.

After MEP Works

After Landscaping Works

After getting government authorities approval

Final Handing Over

Table 1: Payment Schedule for Workshop Factory

Adjust the schedule for the subcontractor and supplier payments.

Negotiate the payment schedule with the owner.

Table 2: Cash In & Out for Scenario "A"

Table 3: Cash In & Out for Scenario "B"

Table 4:Cash In & Out for Scenario "C"

Acumilative Cash out

Figure 3: Cash Flow In-Out for Scenario "A"

Figure 4: Cash Flow In-Out for Scenario "B"

Figure 5: Cash Flow In-Out for Scenario "C"

Appendix (I) shows the detailed calculation for each scenario.

Net Present Value (NPV):

Net Present Value

Net Future Value (NFV):

Net Future Value

Time To Money Factor (M):

= (Cash in Cash out) for each month

Risk Management plan.

BILL NO. - DESCRIPTION

BILL NO.01 - PRELIMINARY

BILL NO.02 - EARTH WORK

BILL NO.03 - CONCRETE WORK

BILL NO.04 - STEEL STRUCTURE

BILL NO.05 - BLOCK WORK

BILL NO.08 - PLASTER & FINSHING

BILL NO.09 - PAINTING

10 BILL NO.10 - LANDSCAPING

11 BILL NO.11 - EQUPMENT

12 BILL NO.12 - MECHANICAL (HVAC)

13 BILL NO.13 - PLUMPING & DRAINAGE

14 BILL NO.14 - ELECTRICAL

BILL NO.01 - PRELIMINARY

BILL NO.02 - EARTH WORK

BILL NO.03 - CONCRETE WORK

BILL NO.04 - STEEL STRUCTURE

BILL NO.05 - BLOCK WORK

BILL NO.07 - DOORS & WINDOWS

BILL NO.08 - PLASTER & FINSHING

BILL NO.09 - PAINTING

BILL NO.10 - LANDSCAPING

BILL NO.12 - MECHANICAL (HVAC)

BILL NO.14 - ELECTRICAL

Total Cash out / month

Entiteled Payemtn / Month

Payment Schedule for Senario "A"