Which one is correct?

You develop a detailed cost estimate as shown in Figure 2 Figure 2: Category Activity/Deliverables Initial Estimate Adjusted Estimate Labor Site Preparation 10,000 10,000 Labor Concrete 40.000 20.000 Labor Framing 30,000 30,000 Labor Roofing 30,000 20,000 Labor Plumbing 20,000 20,000 Labor Electrical 25,000 25,000 Labor Interior Finish and Trim 17,500 17,500 Labor Exterior Siding and Paint Labor 25,000 15,000 Labor Landscape and Lawn 5,000 5,000 Labor General Contracting and Project Management 30,000 30,000 Subtotal - Labor 232,500 192,500 Materials Lumber 35,000 25,000 Materials Exterior Siding and Trim 37,500 17,500 Materials Roofing and Trim 40,000 20,000 Materials Plumbing Supplies 10,000 10,000 Materials Kitchen and Bath Fixtures 22,500 22,500 Materials Electrical Supplies and Fixtures 17,500 17,500 Materials Wall Covering and Paint 5,00 5,000 Materials Flooring 10,00 10,000 Materials Exterior Siding and Trim 25,000 15,000 Materials Landscape and Lawn 15,000 15,000 Subtotal - Materials 217,500 157,500 Equipment Rental 10,000 10,000 Consulting Architecture and Plan Review 20,000 20,000 Reserve Risk Reserve 20,000 20,000 Total 500,000 400,000 Their requirements for premium roofing and siding, a large concrete driveway, and concrete courtyard contribute to an initial estimate of nearly $500,000 - well above their firm budget of $400,000. While disappointing, Ralph and Maria still have time to adjust their requirements to fit under their budget cap. You delay the project start by over a week, but that was less disruption than even larger delays and cost later if you were to make these changes once materials were ordered and work crews were scheduled. This is an example of how estimates based on specific requirements and a bottoms-up plan are more accurate, and the extra planning time is justified when higher confidence is required. You now have a good bottom-up cost estimate for labor, materials, and other expenses. Ralph and Marie must work with their bank and parents to ensure funds are available when needed to cover the construction costs. The bank wants a schedule for the loan draws, and Ralph's parents need to know when to liquidate investments to free up the money. Construction has started, the initial funding is nearly gone, and your concrete contractor is demanding payment before they will do any more work. How do you proceed?Their requirements for premium roofing and siding, a large concrete driveway, and concrete courtyard contribute to an initial estimate of nearly $500,000 well above their firm budget of $400,000. While disappointing, Ralph and Maria still have time to adjust their requirements to fit under their budget cap. You delay the project start by over a week, but that was less disruption than even larger delays and cost later if you were to make these changes once materials were ordered and work crews were scheduled. This is an example of how estimates based on specic requirements and a bottoms-up plan are more accurate, and the extra planning time isjustified when higher condence is required. You now have a good bottom-up cost estimate for labor, materials, and other expenses. Ralph and Marie must work with their bank and parents to ensure funds are available when needed to cover the construction costs. The bank wants a schedule for the loan draws, and Ralph's parents need to know when to liquidate investments to free up the money. Construction has sta rted, the initial funding is nearly gone, and your concrete contractor is demanding payment before they will do any more work. How do you proceed? 0 Estimate equal payments based on the total cost and six-month proiect duration. Ask the bank to release the next draw immediately to avoid delays with your concrete contractor. 0 Take a week to build a time-phased budget based on your project schedule. Next)