Jagboro, G O (1998) The effect of payment for advance purchase of building materials on contractor's cash-flow projections. Journal of Financial Management of Property and Construction, 3(3), pp. 71-83. ISSN 1366-4387
Abstract
As an economic activity a construction project may be considered as the utilisation of material, labour, plant and human resources for the realisation of building and other infrastructure. To facilitate the execution of the project on site, parties have over the years adopted the use of mobilisation fee as a way of reducing the financial risks to contractors and clients in Nigeria. The objective of this paper was to study the effect of payment for advance purchase of materials on contractor's cash-flow projections. The Net Present Value Technique, (NP VT), was adopted in assessing the present worth of payment made under advance payment schedule vis-a-vis the projected cash flows in a monthly and bimonthly valuations. The result showed that the Net present value (NPV) under the Advance Payment Schedule (APS) was 2.67% and 9.75% higher when compared with the expected monthly and bimonthly valuations respectively despite the inherent level of delay.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | building materials, cash-flow, investment, Nigerian construction projects, profit margin |
| Index terms: | building material, Nigeria, cash flow, construction project, human resource, net present value, economic activity, profit |
| Subjects: | Geography, production management, financial management, management, economic analysis, building materials |
| Topics: | Business Strategy, Cost Management, Project Management, Human Resources, Design Practice, Geographical Context |
| Descriptive scope: | 2 PC |
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