Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Given the following cost expenditures for a small building project: Month 1 Month 2 Month 3 Direct costs $125,000 $25,000 $115,000 $20,000 $75,000 $15,000 Indirect

image text in transcribed

Given the following cost expenditures for a small building project: Month 1 Month 2 Month 3 Direct costs $125,000 $25,000 $115,000 $20,000 $75,000 $15,000 Indirect costs a. calculate the maximum overdraft and the ROR of the investment. b. as the second scenario, the owner will agree to the payment of a $65000 mobilization item ($40000 immediately on the commencement of the project and $25000 at the end of month 1) to the contractor. This will be deducted from the final payment to the contractor. For this scenario, calculate the maximum overdraft. Assume: Markup = 15% Retainage = 10% throughout the project Finance charge = 0.8% month Payments are billed at end of month and received one month later. Given the following cost expenditures for a small building project: Month 1 Month 2 Month 3 Direct costs $125,000 $25,000 $115,000 $20,000 $75,000 $15,000 Indirect costs a. calculate the maximum overdraft and the ROR of the investment. b. as the second scenario, the owner will agree to the payment of a $65000 mobilization item ($40000 immediately on the commencement of the project and $25000 at the end of month 1) to the contractor. This will be deducted from the final payment to the contractor. For this scenario, calculate the maximum overdraft. Assume: Markup = 15% Retainage = 10% throughout the project Finance charge = 0.8% month Payments are billed at end of month and received one month later

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Derivatives And Risk Management

Authors: Robert Brooks, Don M Chance

9th Edition

1133190197, 978-1133190196

More Books

Students also viewed these Finance questions