Pre-Estimate Cash Flow Analysis

by David B. Ashley, Grad. Student; Construction Inst., Civ. Engrg., Stanford Univ., Stanford, Calif.,
Paul M. Teicholz, (M.ASCE), Manager; Systems and EDP, Guy F. Atkinson, Co., South San Francisco, Calif.,

Serial Information: Journal of the Construction Division, 1977, Vol. 103, Issue 3, Pg. 369-379

Document Type: Journal Paper


A technique is developed for modeling the cash flow of a construction project. Alternative methods of specifying cost and earnings flows allow great flexibility in modeling a variety of project and contractual conditions. The net interest, cost, and present worth associated with a given cash flow is calculated. A linear unbalancing rule is used to model the effect on cash flow of early payments. This information is valuable when deciding whether or not to bid a given project, and as a method of estimating the interest cost and net worth associated with a given project schedule and bidding strategy. A computer program for a minicomputer was developed to reduce the effort necessary for using this model, and to allow reader participation during the stages of analysis.

Subject Headings: Financial management | Computer models | Construction costs | Bids | Construction methods | Linear functions | Payment | Scheduling

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