2. (a) You are preparing a Cost Plan No 1 for the proposed hostel project which is planned to be started in early 2018 and completed by end 2020. Describe how the historical cost can be adjusted to today's cost and also updated to the date of tendering in end 2017. [12 marks] (b) A forecasted tender price index has been prepared by your research department as shown in Figure 2, indicating that the tender price index will generally increase in coming years due to the labour shortage and the high inflation of building materials imported from China. On the other hand, the local construction workload may also fluctuate dramatically due to the uncertain local government policy and global economic outlook which would lead to a change in the tender price index. Based on this information, comment the future tender price trend and also describe how you estimate the likely inflation cost during the construction stage between early 2018 and end 2020. Forecasted Tender Price Index 2 500 2000 1 500 Tender Price Index 1000 ASD's TPI Forecasted to 500 0 12341234112131411234123411234112341234112341234123412314123411234 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Year Figure 2: Forecasted Tender Price Index [8 marks] 2. (a) You are preparing a Cost Plan No 1 for the proposed hostel project which is planned to be started in early 2018 and completed by end 2020. Describe how the historical cost can be adjusted to today's cost and also updated to the date of tendering in end 2017. [12 marks] (b) A forecasted tender price index has been prepared by your research department as shown in Figure 2, indicating that the tender price index will generally increase in coming years due to the labour shortage and the high inflation of building materials imported from China. On the other hand, the local construction workload may also fluctuate dramatically due to the uncertain local government policy and global economic outlook which would lead to a change in the tender price index. Based on this information, comment the future tender price trend and also describe how you estimate the likely inflation cost during the construction stage between early 2018 and end 2020. Forecasted Tender Price Index 2 500 2000 1 500 Tender Price Index 1000 ASD's TPI Forecasted to 500 0 12341234112131411234123411234112341234112341234123412314123411234 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Year Figure 2: Forecasted Tender Price Index [8 marks]