14 - A contractor will face negative cash flow in the construction project as shown below. This is due to the late payment of monthly progress payments by the employer and the fact that the cash guarantee is kept by the employer until the end of the project. The interest on the money that the contractor will borrow to meet this negative money flow will be 2% per month. If the debt was taken without interest, how much debt would be left when the contractor pays his debts as a result of the progress payment? January -85 000 p.b. (currency unit) February -120 000 p.b. March -45 000 p.b. April -90 000 p.b. May -63 000 p.b. June -15 000 p.b. July + 295 000 p.b. August + 210 000 p.b. A) 78 000 B) 85 000 C) 87 000 D) 0 E) 90 000
14 - A contractor will face negative cash flow in the construction project as shown below. This is due to the late payment of monthly progress payments by the employer and the fact that the cash guarantee is kept by the employer until the end of the project. The interest on the money that the contractor will borrow to meet this negative money flow will be 2% per month. If the debt was taken without interest, how much debt would be left when the contractor pays his debts as a result of the progress payment? January -85 000 p.b. (currency unit) February -120 000 p.b. March -45 000 p.b. April -90 000 p.b. May -63 000 p.b. June -15 000 p.b. July + 295 000 p.b. August + 210 000 p.b. A) 78 000 B) 85 000 C) 87 000 D) 0 E) 90 000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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14 - A contractor will face negative cash flow in the construction project as shown below. This is due to the late payment of monthly progress payments by the employer and the fact that the cash guarantee is kept by the employer until the end of the project. The interest on the money that the contractor will borrow to meet this negative money flow will be 2% per month. If the debt was taken without interest, how much debt would be left when the contractor pays his debts as a result of the progress payment?
January -85 000 p.b. (currency unit)
February -120 000 p.b.
March -45 000 p.b.
April -90 000 p.b.
May -63 000 p.b.
June -15 000 p.b.
July + 295 000 p.b.
August + 210 000 p.b.
A) 78 000
B) 85 000
C) 87 000
D) 0
E) 90 000
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