Impact of Retention and Margin on Project Cash-flow
Now a days construction project faces more problems of uneconomical projects, this is because of their improper utilization of resources and funds available with project. So to overcome this problem one should have to give more importance to the proper utilization of sources of funds, because when construction projects are in progress, its cash flow is the most important that can affect the profitability. When a construction project is in progress, it would be beneficial to the contractor if prior knowledge on trend of cash flows in the project is available. The purpose of this paper is to study the various factors affecting project cash flow and to study their impact on project cash flow. The different factors are mobilization advance, the margin in the project, retention, credit arrangement of the contractor with labour, material, plant and equipment suppliers and other sub-contractors, delay, no delay in payment variation risk and material cost variances etc. This paper discusses impact of margin and retention on cash flow. According to cash flow calculations s-curve diagrams for respective retention and margin cases are drawn and then compared with each other which shows how factors affects the project cash flow.