A construction company is negotiating on a construction project with a three -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 9% retention. Final payment is expected one month after completion of the project and will include payment of retention. Additionally,

• The construction company pays material suppliers, equipment vendors, and project overhead in full when it receives payment from the owner pay when paid.
• The construction company pays subcontractors when it receives payment from the owner but withholds 11% retention pay when paid.
• Subcontractors retention is paid in full one month after the completion of the project.
• The company pays for labor weekly.
• Indirect costs are 18% for the construction company.

1 2 3 4 Month Direct Costs Materials Labor Equipment Project Overhead Sub Contractor $1.500 $2,200 $1,200 $2,100 $2,000 $9,000 $7,000 $700 $1,700 $1,200 $4,000 $14,600 $4,500 $3,000 $1,200 $1,400 $5,000 $15,100 Totals $13,000 $5,900 $4,100 $4,700 $11,000 $38,700 Total Direct Costs Profit &GOH (Indirect Costs) Bill To owner Money Received from Owner/GC Money Received from the owner Retention held by the owner Retention released by the owner Total Money Received (Cash In) Payments made to suppliers, labor, and sub Paid for Materials Paid for Labor Paid to Equipment Supplier Paid to Project Overhead Paid to Sub Contractor Retention held from Sub Contractor Retention released to the Sub Total Payments (Cash out) Net Cash Flow at Month's end (Cash in - Cash out) Total cash generated at Month's end (after payment is received from the owner) Cash needed for the project before payment is received from the owner Effective Cash needed for the project before payment is received from the owner Total Cash invested in the project before payment is received from the owner Month with max cash need and the amount: Total amount of cash needed for the project is 1 2 3 4 Month Direct Costs Materials Labor Equipment Project Overhead Sub Contractor $1.500 $2,200 $1,200 $2,100 $2,000 $9,000 $7,000 $700 $1,700 $1,200 $4,000 $14,600 $4,500 $3,000 $1,200 $1,400 $5,000 $15,100 Totals $13,000 $5,900 $4,100 $4,700 $11,000 $38,700 Total Direct Costs Profit &GOH (Indirect Costs) Bill To owner Money Received from Owner/GC Money Received from the owner Retention held by the owner Retention released by the owner Total Money Received (Cash In) Payments made to suppliers, labor, and sub Paid for Materials Paid for Labor Paid to Equipment Supplier Paid to Project Overhead Paid to Sub Contractor Retention held from Sub Contractor Retention released to the Sub Total Payments (Cash out) Net Cash Flow at Month's end (Cash in - Cash out) Total cash generated at Month's end (after payment is received from the owner) Cash needed for the project before payment is received from the owner Effective Cash needed for the project before payment is received from the owner Total Cash invested in the project before payment is received from the owner Month with max cash need and the amount: Total amount of cash needed for the project is