Project Finance

Question 1

Why is a Cash Flow important?

Answer 1

• Allows employer to gain an understanding of their financial commitment over the duration of the project
• It acts as a check against valuations
• Can give early indications of financial difficulties
• Helps Clients to plan expenditure

Question 2

What is a Cash Flow?

Answer 2

Cash Flow refers to the movement of cash into or out of a business or project. It is usually measured during a specified, finite period of time.

Question 3

What is a Cost Report?

Answer 3

A document that summarises the actual and forecast costs of a project.

Question 4

What is the purpose of a Cost Report?

Answer 4

To inform the client in a construction project of the likely outrun cost of the construction project.

Question 5

What information does a Cost Report typically include?

Answer 5

• Construction costs
• Professional fees
• Statutory fees and changes
• Third-party costs
• Direct works costs
• Land costs
• Agency costs
• Finance costs
• Legal fees

Question 6

What is a provisional sum?

Answer 6

Allowance for an item of work that the contractor has insufficent information to price accurately.