Question 3: Cash flow and interim valuations Table Q3.1 is the contractor's budgeted cost liabilities for a contract. The contractor will add a contribution mark-up of 8% to the estimated cost of each item in the bill of quantities. The contract conditions allow for monthly measures to be made and payment of the amount certied, less 10% retention. is made one month later. The retention money is repaid six months after the practical completion of the project. The weighted average delay between incurring a cost liability and making payment may be calculated from the information given in Table Q3. l_, which shows the cost and the delay associated with each cost element. Table I 3.1 Data for cash ow forecasting ex cise. Cost of work executed in months 000) -1. If the current interest rate on borrowed capital is 14% pa, what reduction in the contractor's budgeted contribution will occur due to interest changes? What is the maximum amount of cash needed in order to execute the contract? (Each month may be assumed to be 41-"? weeks.)