Nisha Yadav Escorts Service Ernakulam ❣️ 7014168258 ❣️ High Cost Unlimited Ha...
ACH 216 Lecture 07 (Project Funding)
1. Project Management & Control Project Funding (LECTURE 7) Scheduling (LECTURE 8) Issues During the Construction Project (LECTURE 9) Materials Management and Quality Control (LECTURE 10)
19. Project Cost Control In the planning phases, more thorough investigations and more accurate cost estimates are being required for those seeking financial backing. To remain competitive, contractors are being forced to monitor their cost accounts more closely and to know where losses are occurring.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29. Cost Control BCWP – BCWS = schedule variance BCWP – ACWP = cost variance These two variances assist in evaluating and controlling project risk by measuring progress in monetary terms.
30.
31.
32.
33.
34.
35. The maximum working capital requirement, which occurs in month 5, is $208,605. To construct the project, the contractor must have at least the amount available. Change orders will increase the working capital required. The profit was reduced by $7,518 due to the cost to borrow the money in order to perform the work. The profit reduction is real whether the contractor borrows the money or uses its own assets. Project Cash Flow Calculation Estimated cost $500,000 Bid Price $550,000 Cost of money 0.75% Invoice date 5th of the month Payment received 30 days later Retainage 10% of the first 50% (of contract amount) MONTH 1 2 3 4 5 6 7 8 TOTAL Estimated costs $50,000 $100,000 $100,000 $100,000 $100,000 $50,000 $500,000 Invoice Amount $49,500 $99,000 $99,000 $110,000 $110,000 $82,500 $550,000 Amount received $0 $0 $49,500 $99,000 $99,000 $110,000 $110,000 $82,500 $550,000 Cash required $50,000 $150,375 $202,003 $204,518 $207,052 $148,605 $39,719 Interest $375 $1,128 $1,515 $1,534 $1,553 $1,115 $298 $7,518 TOTAL $50,375 $151,503 $203,518 $206,052 $208,605 $149,720 $40,017 $0 PROFIT $42,483
36.
37. Importance of Money Management Rising construction costs have increased the pressure on construction companies to carefully monitor and control the flow of money at all levels. As a result, more emphasis is being placed on cash flow and cost control functions in construction management than ever before.
