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# FACULTY OF ENGINEERING (HK01)

## KA40302 PROJECT MANAGEMENT

INDIVIDUAL ASSIGNMENT

TOPIC: CASHFLOW

## Matrics Number : BK16110267

Email : nhuda1572@gmail.com

## Submission date : 12 December 2019

KA40302
PROJECT MANAGEMENT
TOPIC : CASHFLOW

Question
A construction project has the contract value of RM11,900,000 and 10 months
completion period staring Jan 2020. The schedule for the construction of this project
is as follows:

The average profit margin charge by contractor is 12% from the value. At the end of
each month the contractor will submit their claim and the actual payment will only
deposited into contractor’s account exactly one month after that. The retention fund
for each payment is 10% up to maximum of 5% of contract value. 50% of the retention
fund will be returned upon completion of the project and another 50% will be returned
upon the expiry of the 12 months defect liability period.

## 1. S-Curve showing the cumulative value of the project

2. Cash flow table showing the following information:
 Cumulative value of the project
 Cumulative Profit
 Cumulative Cost
 Cumulative value minus retention fund
 Cumulative cash out
 Cumulative cash in
3. Plot the cash in cash out graph
4. Determine the maximum cash flow requirement for the contractor to execute this
project
Solution

A 3 1,200,000
B 4 1,500,000
C 4 2,000,000
D 6 2,400,000
E 6 1,200,000
F 4 1,600,000
G 5 1,000,000
H 4 1,000,000

## 10% up to maximum 5% of contract value.

5
 RM11,900,0 00  RM595,000
100

Retention fund
50% retention will be returned upon
completion
Other 50% will be returned upon the expiry of
12 months DLP.
Question 1
Activities Months
1 2 3 4 5 6 7 8 9 10
A 400,000 400,000 400,000
B 375,000 375,000 375,000 375,000
C 500,000 500,000 500,000 500,000
D 400,000 400,000 400,000 400,000 400,000 400,000
E 200,000 200,000 200,000 200,000 200,000 200,000
F 400,000 400,000 400,000 400,000
G 200,000 200,000 200,000 200,000 200,000
H 250,000 250,000 250,000 250,000

Value 400000 1175000 1875000 1875000 2075000 1700000 1450000 650000 450000 250000
Figure 1: S- Curve Graph
Question 2

Months 0 1 2 3 4 5 6 7 8 9 10 11 →22

Monthly 0 400000 1175000 1875000 1875000 2075000 1700000 1450000 650000 450000 250000
value
Cumulative 0 400000 1575000 3450000 5325000 7400000 9100000 10550000 11200000 11650000 11900000
value
Profit (12%) 0 48000 141000 225000 225000 249000 204000 174000 78000 54000 30000

Cumulative 0 352000 1034000 1650000 1650000 1826000 1496000 1276000 572000 396000 220000
profit

Cost 0 352000 1034000 1650000 1650000 1826000 1496000 1276000 572000 396000 220000

Cumulative 0 352000 1386000 3036000 4686000 6512000 8008000 9284000 9856000 10252000 10472000
cost

Retention 0 40000 157500 345000 532500 595000 595000 595000 595000 595000 595000
fund

Cumulative 0 360000 1417500 3105000 4792500 6805000 8505000 9955000 10605000 11055000 11305000
value
minus
retention
fund
Cumulative 0 352000 1386000 3036000 4686000 6512000 8008000 9284000 9856000 10252000 10472000
Cash Out

Cumulative 0 0 360000 1417500 3105000 4792500 6805000 8505000 9955000 10605000 11055000 11602500 11900000
Cash In
Cash 352000 1386000 2676000 3268500 3407000 3215500 2479000 1351000 297000 -133000 -11055000 -11602500 -11900000
Needed
Question 3

## Figure 2: Cash in and Cash out Graph

Question 4
The maximum cash flow requirement for the contractor to execute this project is RM 3,407,000
immediately before payment is received on month of April.