Problem 2. You are asked to provide the following calculations 1. 2. 3. Unit Bid Prices (20 points) With no advance payment, calculate the Project Cash Flow and determine the maximum amount of financing required, and the Net profit expected. (20 points) Given the fact that the project is very short in time, the owner is willing to make a 50% advance payment to the Company and a single final payment at the end of the project (4th month). Should the Company take it? (10 points) Data Provided by your Manager: Field Office overhead is 20%, Home office overhead is 4%, the Cost of Bonding the project is 0.5%. Assume a gross profit of 10%. The Owner will pay invoices one month after they are approved (Invoices presented on first month will be paid on the second month, the invoice for the second month will be paid on the third month, so on and so for). The OH expense for the first month is expected to be 40% of the Total OH amount of the project. The balance of the OH will be spread equally over the remaining 2 months of the project. Use the tables provided to show your results. Unit Cost Unit Bid Price Total Amount | Total Bid Amount $7.00 Qty 30,000 4,000 10,000 Unit cy If cy Description Excavation 15" Sewer Pipe Compacted Backfill $15.00 $10.00 Totals Unit Bid Price Month 4 Qty 30000 4000 Unit cy If Description Excavation 15" Sewer Pipe Compacted Backfill Unit Cost $7.00 $15.00 Month 1 8000 500 Month 2 12000 2000 Month 3 10000 1500 10000 cy $10.00 2000 3000 5000 Financial Analysis Invoice Direct Cost OH Cost Cash out Payments Cash Flow Cumulative Financial Analysis 50 % advance payment and one final payment at the end of the project Month 1 Month 2 Month 3 Month 4 Invoice Direct Cost OH Cost Cash out Payments Cash Flow Cumulative Problem 2. You are asked to provide the following calculations 1. 2. 3. Unit Bid Prices (20 points) With no advance payment, calculate the Project Cash Flow and determine the maximum amount of financing required, and the Net profit expected. (20 points) Given the fact that the project is very short in time, the owner is willing to make a 50% advance payment to the Company and a single final payment at the end of the project (4th month). Should the Company take it? (10 points) Data Provided by your Manager: Field Office overhead is 20%, Home office overhead is 4%, the Cost of Bonding the project is 0.5%. Assume a gross profit of 10%. The Owner will pay invoices one month after they are approved (Invoices presented on first month will be paid on the second month, the invoice for the second month will be paid on the third month, so on and so for). The OH expense for the first month is expected to be 40% of the Total OH amount of the project. The balance of the OH will be spread equally over the remaining 2 months of the project. Use the tables provided to show your results. Unit Cost Unit Bid Price Total Amount | Total Bid Amount $7.00 Qty 30,000 4,000 10,000 Unit cy If cy Description Excavation 15" Sewer Pipe Compacted Backfill $15.00 $10.00 Totals Unit Bid Price Month 4 Qty 30000 4000 Unit cy If Description Excavation 15" Sewer Pipe Compacted Backfill Unit Cost $7.00 $15.00 Month 1 8000 500 Month 2 12000 2000 Month 3 10000 1500 10000 cy $10.00 2000 3000 5000 Financial Analysis Invoice Direct Cost OH Cost Cash out Payments Cash Flow Cumulative Financial Analysis 50 % advance payment and one final payment at the end of the project Month 1 Month 2 Month 3 Month 4 Invoice Direct Cost OH Cost Cash out Payments Cash Flow Cumulative