CEE 4100 Test 2 Questions And Answers
Cash flow projection - ANS-projection of income and expenses during project life, based on time
scheduling
Progress Payments - ANS-flow of money from owner to contractor
Contractor prepares monthly progress claim (bill), Owner evaluates and pays & keeps re...
CEE 4100 Test 2 Questions And Answers Cash flow projection - ANS-✔✔ projection of income and expenses during project life, based on time scheduling Progress Payment s - ANS-✔✔ flow of money from owner to contractor Contractor prepares monthly progress claim (bill), Owner evaluates and pays & keeps retainage from each (until billings = 50% of total) Lump Sum - ANS-✔✔ percentage of total contract completion Unit Price - ANS-✔✔ actual field measurements of work completed Expenditure Schedule - ANS-✔✔ Project S curve Contractor must provide schedule of estimated progress & costs (direct & indirect) Contractor's Income Profile - ANS-✔✔ Stair step since progress payments paid in discrete amounts Pay = (1+markup)*(direct+indirect) - (retainage rate)*[(1+markup)*(direct*indirect)] Contractor's Financing - ANS-✔✔ Bank extends line of credit in meantime But charges interest on overdraft (outstanding balance, difference) Overdraf t factors - ANS-✔✔ Increase markup = decrease overdraft Increase amount of retainage = increase overdraft Increase time btw billing & paying = increase overdraft Banks Evaluation - ANS-✔✔ Contractors = high risk, so loan only thru inventories and partially complete with high interest rate Front Payment/Mobilization Pay - ANS-✔✔ advance payment at inception, owner saves bc now bank considers less risky for short term loan Shift revenue curve to left of income so no overdraft Overdraft requirement - ANS-✔✔ Contractor needs to know max overdraft Rate of Return analysis - ANS-✔✔ helpful to compare economic value of varying payment schemes (ie. retainage policies, delay in payment, payment of mobilization) Net present value btw revenue & expense With mobilization payment - ANS-✔✔ Revenue closer to expense so area btw reduced = overdraft reduces, peak financial req. reduced ROR increases Estimating - ANS-✔✔ Determination of probable construction costs of a project Anticipated approximate cost of construction Role of estimating - ANS-✔✔ pricing product/service, basis for production planning/cost control, supports owner decision making, assists designer, define bid price Estimating process - ANS-✔✔ Conversion of Drawings to Quantities of materials & Workhours of labor & equipment Reliable cost evaluation (quantity and performance) Organizing info
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