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HW-8 (Show your work in Table, Final answers represents 20%) Q-1 (50 pts): The construction decides to act as the owner on the project. The construction company will be paid $500,000 for the project at the end of the seventh month. In addition to the construction costs, the construction company has the following soft costs: land purchase, $150,000; engineering and design fees, $15,000; building permits, $3,000; government fees, $5,000; and other miscellaneous costs, $10,000. The soft costs will be paid at the end of month zero. The construction company pays material suppliers in full on the last day of the month following the month the materials were supplied to Costs the project. The subcontractors will be paid on the Month Materials ($) Labor ($) Sub. ($) same schedule as the suppliers; however, the 1 construction company will withhold 5% retention 8,800 8,100 13,100 from the subcontractors' payments, which will be 2 14,200 11,900 31,400 paid to the subcontractors at the end of the seventh 3 21,000 19,800 31,700 month. The construction company pays for labor 4 6,800 7,600 28,100 weekly. Determine the monthly cash flows and total 5 5,100 7,000 17,900 cash generated by the project at the end of each month and just before the payment is received. 6 4,100 4,100 9,300 What is the maximum amount of cash invested by Total 60,000 58,500 131,500 the company during the completion of the project? 6

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