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Draw the cash flow diagram for the given project below and then calculate the project net profit. The following table shows the activities description, dependency,
Draw the cash flow diagram for the given project below and then calculate the project net profit. The following table shows the activities description, dependency, duration, and cost elements. Assume the following:
- Project overhead 8%.
- Tax 3%.
- Bond 1.25%.
- Profit 6%.
- Interest rate 9% per year.
- Down payment 10% with a guarantee letter, which costs 0.25% per month paid to the bank at the project start date
- A performance guarantee letter of 10% will be submitted from the contractor at the project begin.
- Invoices are submitted every month and will be paid a month later.
- Retention 10% and will be paid at the last invoice.
- Subcontractors: retention 10% will be paid at the last invoice, down payment 20%.
- Labor: labor expenses to be paid bi-weekly.
- Equipment: equipment expenses will be paid 50% at the begin of the work item and the rest at the end of the work item
- Material: material expenses will be paid 50% upon delivery and 50% two weeks later, material invoices will be paid to the contractor 75% upon delivery and the rest during activity construction (Assume material will be delivered just at the activity start date).
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Job Code
Activities Description
Depends on
Duration
(weeks)
Labor Costs
Material Costs
Equipment Costs
Sub-
contractor Costs
A
Build Pump Foundation
---
6
200,000
350,000
120,000
350,000
B
Build Pump House
A
8
90000
285000
---
156000
C
Install Base Plate
A
4
---
---
234000
450000
D
Install Electrical Motor
B, C
6
---
---
---
150000
E
Install Pump
D
8
74000
178000
75000
---
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