Question

12.1 Given the following cost expenditures for a small warehouse project to include direct and indirect charges), calculate the peak financial requirement, the average overdraft, and the ROR on invested money. Sketch a diagram of the overdraft profile. Assume 12% markup Retainage 10% throughout project Finance charge = 1.5% month Payments are billed at end of month and received one month later.

dont calculate ROR

please show work

Answer 1

Overdraft Calculations with Mobilization Payment
	Month
	1		2		3		4		5		6
Direct cost	$   25,000		$   65,000		$   75,000		$   15,000
Indirect cost	$      5,000		$      5,000		$      5,000		$      5,000
Subtotal	$   30,000		$   70,000		$   80,000		$   20,000
Markup (12%)	$      3,600		$      8,400		$      9,600		$      2,400
Total Billed	$   33,600		$   78,400		$   89,600		$   22,400
Retainage withheld (10%)	$      3,360		$      7,840		$      8,960		$      2,240
Payment received		$ 20,000		$ 30,240		$   78,750		$ 100,000		$   17,500
Total cost to date	$   30,000		$ 100,000		$ 180,000		$ 200,000		$ 200,000
Total amount billed to date	$   33,600		$ 112,000		$ 201,600		$ 224,000		$ 224,000
Total paid to date		$ 20,000		$ 50,240		$ 128,990		$ 228,990		$ 246,490
Overdraft end of month	$   30,000		$   80,450		$ 131,417		$   74,638		-$   24,242		-$   41,742
Interest on overdraft balance (1.5%)	$         450		$      1,207		$      1,971		$      1,120
Total amount financed	$   30,450		$   81,657		$ 133,388		$   75,758		-$   24,242		-$   41,742