Chapter 9 - 7 What is outstanding balance or overdraft...

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Chapter 9 Questionnaire 1) What do public agencies require a contractor to provide in order to get paid? Escrow 2) What is an S-curve? Cumulative expenditure over time. 3) How does the money flow from owner to the contractor? Progress payment Work through what has been complete then paid at the end of the month 4) What is retainage? Owner deducts 10% up to 50% of the project value 5) When does retainage stop? 50% completion 6) What does the contractor do once the revenue to the contractor lags the expenditure? Get a load / Owner helps through mobilization
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Unformatted text preview: 7) What is outstanding balance or overdraft? Difference between revenue and expenditure 8) How do you minimize the amount of overdraft and therefore the interest payments? Owner gets financing from bank and gives a loan to the contractor / Owner pays mobilization charge for contractor. 9) What is prime rate? Interest charged to preferred customer 10) How does the contractor know how much credit is available? By doing overdraft calculation...
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