Which one is correct?

You review your plans and discover that you have monthly costs as shown in Figure 3. Figure 3: Category Activity/Deliverables Total Cost Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Labor Site Preparation 10,000 10,000 Labor Concrete 20,000 10,000 10,000 Labor Framing 30,000 20,000 10,000 Labor Roofing 20,000 15,000 5,000 Labor Plumbing 20,000 $,000 10,000 5,000 Labor Electrical 25,000 7,500 7,500 7,500 2,500 Labor Interior Finish and Trim 17,50 2,500 7,500 7,500 Labor Exterior Siding and Paint Labor 15,000 7,500 7,500 Labor Landscape and Lawn 5,000 5,000 Labor General Contracting and Project Management 30,00 5,000 5,000 5,000 5,000 5,000 5,000 Materials Lumber 25,000 20,000 5,000 Materials Exterior Siding and Trim 17,500 10,000 7,500 Materials Roofing and Trim 20,000 5,000 10,000 5,000 Materials mbing Su 10,00 7,500 2,500 Materials Kitchen and Bath Fixtures 22,500 10,000 5.000 5,000 2,500 Materials Electrical Supplies and Fixtures 17,50 2,500 5,000 5,000 2,500 2,500 Materials Wall Covering and Paint 5,000 2,500 2,500 Materials Flooring 10,000 5,000 5.000 Materials Exterior Siding and Trim 15,000 5,000 5,000 5,000 Materials Landscape and Lawn 15,000 10,000 5,000 Equipment Rental 10,000 5,000 5,000 Consulting|Architecture and Plan Review 20,000 20,000 Reserve Risk Reserve 20,000 3,333 3,333 3,333 3,333 3,333 3,335 Total 400,000 55,833 118,333 68,333 63,333 53,333 40,835 The bank will allow Ralph and Marie to draw only $50,000 per month against their loan, so Ralph's parents know ahead of time they must free up about $90,000 in the first three months. The time-phased budget shows that equal funding amounts would have fallen short of the front-loaded costs. Work would have been delayed waiting to pay the work crews and to order materials. This is an example of how a cost estimate alone is not enough, and a good budget will consider cash flow over time to ensure funding is available to keep the project in motion. Ralph has been watching HGTV and is convinced that upgrading to a chef-style kitchen would be a good investment. This will add marble counters, a commercial gas stove with dual-ovens, and custom cabinets. You estimate these upgrades will cost $15,000, but everyone agrees they will add even more value to the house. Ralph & Marie know that you have a $20,000 risk contingency in the estimate and they hope that you can absorb this extra cost, since there is no way they can increase their $400,000 budget. What do you suggest that Marie and Ralph do?0 Make the investment. These upgrades will increase the assessed value and be amortized across the mortgage. They will recover the higher cost plus a prot when they sell the house. 0 If they are determined to make these enhancements, nd somewhere else to reduce cost and stay within the total construction budget. Ralph is frustrated, saying that you are focused only on your project and not the long-te rm value