**See Instructions For Solving @ Bottom** The contractor's construction expenses and owner's paymentsfor a construction project are expressed in then-current inflated dollars in the table below. The monthlyinterest rate required by the bank is 1.3 percent regardless of inflation. Suppose that the work is stopped fortwo months at the end of month 5 due to a labor strike while the monthly inflation rate is 0.7 percent.Under the terms of the contract between the owner and the contractor, suppose that the owner'spayments will be delayed but not adjusted for inflation. Find the cumulative net cash flow with interest dueto overdrafting for the following conditions: (a) if there were no labor strike and (b) when there is a strikefor two months at the end of month 5. **Instructions** 1)Calculate Net Cash Flow - At 2)Calculate : *Et &Et i/2 3)Calculate The Cumulative Cash Flow Before Payment = Ft with & with out interest 4)Calculate Nt =Nt-1 + It-Et + Pt 5) Calculate: It = Nt i - Eti/2 6)Calculate Cumulative Net Cash Flow = Nt with & with outinterest *Annual Interest - It *Cumulative Cash Flow Before Payment Ft with interest *Cumulative Net CashFlow with interest NT with interest *All Calculations For All Equations for 14 Periods Must Be Shown I Needto Verify my calculationsThe contractor's construction expenses and owner's payments for a construction project areexpressed in then-current inflated dollars in the table below. The monthly interest raterequired by the bank is 1.3 percent regardless of inflation. Suppose that the work is stoppedfor two months at the end of month 5 due to a labor strike while the monthly inflation rateis 0.7 percent. Under the terms of the contract between the owner and the contractor,suppose that the owner's payments will be delayed but not adjusted for inflation. Find thecumulative net cash flow with interest due to overdrafting for the following conditions:(a) if there were no labor strike and (b) when there is a strike for two months at the end ofmonth 5.End of month, Contractor'stexpenses Et01234567891011121314Total-$200,000-251,250-404,000-527,852-642,726-799,734-772,800-683,430-447,501-397,442-348,965-270,438-437,42000$6,183,558Owner'sPayment Pt0$225,000360,000468,000567,000702,000675,000594,000387,000342,000298,800230,400370,8001,080,000600,000$6,900,000

The entire amount owed in the construction industry's payment process varies over time due to…

The contractor's construction expenses and owner's payments for a construction project are expressed in then-current inflated dollars in the table below. The monthly interest rate required by the bank is 1.3 percent regardless of inflation. Suppose that the work is stopped for two months at the end of month 5 due to a labor strike while the monthly inflation rate is 0.7 percent. Under the terms of the contract between the owner and the contractor, suppose that the owner's payments will be delayed but not adjusted for inflation. Find the cumulative net cash flow with interest due to overdrafting for the following conditions: (a) if there were no labor strike and (b) when there is a strike for two months at the end of month 5.

The contractor's construction expenses and owner's payments for a construction project are expressed in then-current inflated dollars in the table below. The monthly interest rate required by the bank is 1.3 percent regardless of inflation. Suppose that the work is stopped for two months at the end of month 5 due to a labor strike while the monthly inflation rate is 0.7 percent. Under the terms of the contract between the owner and the contractor, suppose that the owner's payments will be delayed but not adjusted for inflation. Find the cumulative net cash flow with interest due to overdrafting for the following conditions: (a) if there were no labor strike and (b) when there is a strike for two months at the end of month 5.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 34P: The total price of purchasing a basket of goods in the United Kingdom over four years is: year...

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