Given the following cost expenditures (see Table P6.1) for a small warehouse project (to include direct and indirect changes):

A. Calculate the peak financial requirement.

B. Sketch a diagram of the overdraft profile.

C. What would be the impact on the maximum overdraft of giving the contractor a $25,000 mobilization payment? (Show calculation.)

Assumptions:

The markup for this project is 12%.

Retainage is 10% throughout project.

Finance charge is 1.5% per month.

Payments are billed at the end of the month and are received one month later.
All expenses are paid immediately.

Transcribed Image Text:

TABLE P6.1 Monthly Cost Month Monthly cost* 1 2 3 4 69,000 21,800 17,800 40,900 * Direct cost + indirect cost