A construction company is negotiating on a construction project with a six-month duration. On the last day of each month the construction company may bill the owner for the work completed during the month. The owner pays the monthly bills one month after they are received. The owner also holds 5% retention. Final payment is expected on  month after completion of the project and includes payment suppliers in full when it receives payment from the owner. The construction company pays subcontractors when it receives payment from the owner but withholds 5% retention from the subcontractor’s payment.

The construction company pays for labor weekly. The projected monthly material, labor, and subcontractor costs, as well as the amount the construction company will bill the project’s owner each month, are shown in Table 12-9. Determine the monthly cash flows and the total cash generated by the project at the end of each month and just before each payment is received from the project’s owner. What is the maximum amount of cash invested by the company during the completion of the project?
 

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Month 1 2 3 4 5 6 Total Costs Materials ($) Labor ($) 8,800 8,100 14,200 11,900 21,000 19,800 6,800 7,600 5,100 7,000 4,100 4,100 60,000 58,500 Sub. ($) Bill to Owner ($) 13,100 33,000 31,400 63,200 31,700 79,800 28,100 46,800 17,900 33,000 9,300 19,200 131,500 275,000