Financing construction

Financing Construction Financing Construction Cash flows and cash farming Dr Russell Kenley Professor of Construction UNITEC, New Zealand INSERT Spon Press LOGO London and New York First published 2003 by Spon Press 11 New Fetter Lane, London EC4P 4EE Simultaneously published in the USA and Canada by Spon Press 29 West 35th Street, New York, NY 10001 This edition published in the Taylor and Francis e-Library, 2005 “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” Spon Press is an imprint of the Taylor & Francis Group © 2003 Dr Russell Kenley Publisher’s note: This book was composed by the author using Corel VENTURA Publisher All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book has been requested ISBN 0-203-46739-6 Master e-book ISBN ISBN 0-203-77563-5 (Adobe eReader Format) ISBN 0–415–23207–4 (Print Edition) Contents Figures Tables Preface Acknowledgements Permissions Glossary vii xiii xv xix xx xxi Introduction The aims Structure of belief about cash flows Structure of the book References Economic context 11 Introduction The contribution of the construction industry Inflation and interest rates Conclusion References 11 11 13 26 27 Gross cash flows 29 Introduction The nature of construction project cash flows The need for and role of forecasting cash flows Cash flow as a cost management tool Practical cash flow forecasting The search for a new model The Kenley and Wilson Logit model Detailed review of alternative cash flow models A theoretical comparison of the models Tools for cash flow forecasting Conclusion References 29 30 37 39 40 41 46 61 90 94 100 102 Managing through earned value 105 Introduction Integrated and remote performance management concepts Remote monitoring or automated systems Integrative techniques Conclusion References 105 106 114 130 134 135 vi Financing construction The time–cost relationship 137 Introduction The time–cost relationship Worked calculation of B and K Comparative analysis of past studies Alternative models Conclusion References 137 137 143 145 157 157 159 Net cash flows 161 Introduction The nature of construction project net cash flows Roles in net cash flow management Practical cash flow management The theory of modelling net cash flows Testing the net cash flow model Alternative net cash flow models Net cash flow performance management Conclusion References 161 162 164 166 169 180 186 195 200 201 Organisational cash management 203 Introduction The nature of organisational cash flows Contract payment terms—what they really mean? Investigating organisational cash flow Generating funds—continuing the model Centralised management of cash flow Conclusion References 203 205 209 214 224 226 228 229 Cash farming: Strategic management of organisational cash flow 231 Introduction Background Management of organisational cash flow Cash farming techniques Direct use of funds Sub-contracting versus direct labour Signs of a distressed contractor Security of payments Conclusion References 231 232 235 246 255 256 256 259 261 262 Authors Index General index 263 269 Figures 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 2.10 2.11 2.12 2.13 2.14 2.15 2.16 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 3.9 Real value of final expenditure on GDP at international prices and the percentage provided by construction sorted by decreasing GDP per capita Australian postwar annual rates of inflation prior to 1973 (as measured by the consumer price index, all groups weighted average—ABS 6401.0) Australia’s annual increase in CPI (rates of inflation) after 1970 (Australian CPI all groups) International comparison of inflation rates (after Department of the Treasury, 1985) The relationship between the timing of claims and cost escalation Australian interest rates prior to 1973 (ten-year Australian government bonds) Australian interest rates after 1970 (ten-year Australian government bonds) USA interest rates for the last fifty years, with ten-year bonds, the Prime rate and the Federal Fund rate (overnight or short-term) (USA Federal Reserve) Australian interest rates for the last fifty years, with ten-year bonds, the Prime rate and the short-term rate (ABS Statistics, Ecowin) The relationship between the timing of claims and the cost of money Effective ‘real’ interest Australian rates from 1970–2000 Effective ‘real’ UK interest rates from 1970–2000 Effective ‘real’ USA interest rates from 1970–2000 Effective ‘real’ New Zealand interest rates from 1970–2000 The relationship between the timing of claims and the real cost of money The break even point for returns from expenditure on cash management against increasing interest rates Periodic: monthly, staged and turnkey project cash flows Periodic payments for monthly, staged and turnkey project cash flows Cumulative payments for monthly, staged and turnkey project cash flows Periodic and cumulative cash flow Alternative cash flow representation Reading the cumulative value from the chart Example of project data set with fitted curve (Kenley and Wilson, 1986) Stepped inward cash flow with top point trend line Linear transformation for a sample project (Kenley and Wilson, 1986) 12 15 16 17 18 19 19 20 21 22 23 24 24 24 25 25 30 34 34 35 36 37 44 45 48 viii 3.10 3.11 3.12 3.13 3.14 3.15 3.16 3.17 3.18 3.19 3.20 3.21 3.22 3.23 3.24 3.25 3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 3.36 3.37 3.38 Financing construction Mean sample SDY against exclusion range (adapted from Kenley and Wilson, 1986) Boxplot of project SDY values for samples S1 and S2 (Kenley and Wilson, 1986) Random sample of project curves (Kenley and Wilson, 1986) Standard curve analysis for S1 (Kenley and Wilson, 1986) Standard curve analysis for S2 (Kenley and Wilson, 1986) Bromilow’s S curve using Balkau (1975) constants The equivalent Logit curve to Bromilow’s S curve using Balkau (1975) constants The equivalent Logit curve to Bromilow’s S curve using Tucker and Rahilly (1982) constants Peer’s three cost-flow curves Adapted from Betts and Gunner (1993) commercial projects with standard profiles, upper and lower ranges for all projects and outer bounds Tucker’s component probability distributions (p(t) Tucker’s component cumulative distributions P(t) Tucker’s S-curve compared with Bromilow’s constants (Tucker and Rahilly, 1982) and the Logit model DHSS standard curve parameters (Hudson, 1978) with Logit equivalents, Value—to £30k; DHSS: c = – 0.041, k = 7.018; Logit: α = 0.045, β = 1.203 DHSS standard curves for three sets of parameters DHSS standard curves on real axis, using millions GBP (£) (Re-calculated using the DHSS formula, to replicate Hudson, 1978: Figure 2) Khosrowshahi’s periodic distribution where Q = 0.15, R = 0.45 and d = 2.6955 Khosrowshahi’s cumulative distribution where Q = 0.15, R = 0.45 and d = 2.6955 and the Logit equivalent, where α =−0.7666 and β = 2.3686 and SDY = 0.58% Khosrowshahi’s ranges of parameters Miskawi’s S curves for a = 5% to 95% Boussabaine and Elhag’s (1999) underlying profile for fuzzy analysis and the Logit equivalent, where α =0.0 and β =1.6224 and SDY= 0.52% The effect of holding β constant and varying α by ±2σ The effect of holding β constant and varying α by ±2σ The curve envelope of ‘standard curves’ Graphical representation of cash flow models over time Sample curves Sample project: forecast data and fitted curves, SDY = 3.28%, 2.85% Sample project: actual data and fitted curves, SDY = 3.17%, 2.88% Sample project: estimates and source data in real values 54 55 56 56 57 62 63 63 65 67 69 70 70 72 72 75 81 82 83 84 85 88 88 89 92 94 98 100 100 ix 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 4.21 4.22 5.1 5.2 5.3 The control cycle The control–cost trade off Actual cash flow lagging behind forecast (adapted from Kenley, 2001) Correcting by changing the forecast cash flow profile (adapted from Kenley, 2001) Correcting by changing the forecast end-date (adapted from Kenley, 2001) Correcting by accelerating progress (adapted from Kenley, 2001) Correcting by changing the forecast cost (adapted from Kenley, 2001) The reverse example: project appears ahead of schedule (adapted from Kenley, 2001) The reverse example: project appears cost will over-run (adapted from kenley, 2001) Builder’s forecast claims for the sample project Builder’s actual claims for the sample project Forecast and actual data for the hypothetical project with fitted trend curves Illustrates the way the forecast trend line fits the actuals when stretched laterally (adapted from Kenley, 2001) Solving for Equation 4.3 = Diagrammatic representation of variability in the forecast, of the end date, as the project progresses (adapted from Kenley, 2001) Actual forecast end-date during the progress of the project (Kenley, 2001) (Bottom graph) Forecast and actual data for the case study project, with trend lines fitted (Top graph) Corresponding progressive forecast end date (Kenley, 2001) A sample of project cash flow charts and their resultant end forecast For each—(Bottom graph) Forecast and actual data for the case study project, —(Top graph) Corresponding progressive forecast end date (adapted from Kenley, 2001) Progressive forecasting of end date, for various major projects (Kenley, 2001) Progressive forecasting of end date, for a set of small institutional buildings (Kenley, 2001) Earned value analysis—case Earned value analysis—case Stochastic range of earned value outcomes Bromilow’s original data set, showing the spread of the transformed data and the quartile limits (Bromilow and Henderson, 1977) Factors affecting construction project duration (adapted from Kumaraswamy and Chan, 1995) Yeong’s model for contract performance (adapted from Yeong, 1994) 107 108 109 110 111 112 112 113 114 115 116 117 119 124 124 126 128 129 129 132 133 134 139 142 143 Cash farming: Strategic management of organisational cash flow 259 SECURITY OF PAYMENTS Liens, bonds, warrantees and insurance The securities available to clients or contractors may play a strategic role in the payment system These are important because they can provide protection in the system but at the same time they reduce the competitiveness of the sector There is a natural desire to install safeguards and securities into the construction payment system to protect the players usually, if the rhetoric is to be believed, from defaulting clients This desire is understandable, but it is important to address the interaction between freeing the system to encourage work and restricting the system to provide safety in the system It is clear, from the focus of this book on the payment system and the strategic management by contractors of their cash flow stream, that contractors’ poor management strategies can result in flow on problems in the event of their failure which far exceed outstanding claims from errant clients However, it is also true that many of those failures would have been brought to collapse by that single action of not paying that last claim The system needs to consider both of those issues when considering security The system is also dependent on its competitiveness for success For example, if contractors make it too onerous or expensive for clients to participate, then they will be discouraged from building or developing Speculative developers would undertake only those projects with clearly viable margins New businesses looking for a home would be discouraged, looking to existing stock for their solutions or perhaps going off-shore To countries like Australia and New Zealand, where attracting new businesses is both necessary and difficult, the country cannot afford to erect barriers to new players It is useful to return to the underlying principle of the progress payment when resolving the issue of security Are they a loan by the client to the contractor to allow them to undertake the work, or are they a payment for work completed and now in the possession of the client and therefore recoverable by the client in the event of a contractor failure? The answer is that, as ‘title vanishes as goods are fixed to the land’ (Davis, 1991) progress payments are somewhere between, which is why the industry has such complex systems and encounters so many difficulties Security in the form of a hold of assets is often touted as a solution Providing a Lien over the title of the land until all claims are met would provide security for a contractor The equivalent security for a client would be for the contractor to hand over the deeds to their company until all works are complete The first discourages clients from entering into projects because at the end they may be prevented from making a rapid sale, being locked into disputes by a vexatious contractor, and therefore suffering loss This is not in the best interests of the construction industry The first is increasingly rare due to its complexity in operation and the way it discourages clients from investing, the second, while not actually being used in practice, would discourage contractors from participating in projects because they would consider the security far outweighed the risk The two are, in function, very similar Davis (1991: 88) discusses the ‘builders lien’, stating: 260 Financing construction Contractors often speak of their right to possession of the site as a ‘builders’ lien’ Under English law, however, contractors not have a lien over the site for prepaid monies and even jurisdictions conferring liens not intend that they should entitle contractors to deny employers possession of the site Rather, they impose a charge on the land or the employer’s interest in it as security for the unpaid balance of the contract sum The concept of a builders’ lien over the site which does prevent the employer regaining possession does, however, appear in South Africa and possibly other jurisdictions For a detailed analysis of the workings of the ‘Wages protection and Contractors’ Liens act’ in one such jurisdiction, refer to Wilson (1976), published before the repeal of that act in New Zealand Payment of all money at the conclusion of the project would protect the client, but would expose the contractor to the costs of funding the work (requiring the progress payment ‘loan’) and would expose them to the risk that the client could default without a Lien, holding no title to the completed works for which they had paid Payment of all money at the start of the project would protect the contractor, but would expose the client to the risk of a contractor default and the loss of their prepayments, furthermore, partially completed work is of questionable value due to the reluctance of new contractors to take on incomplete structural work, the damage that may occur due to weather while settling disputes, etc The true risk to the client is the difference between the amount they have paid at any time and the value of the work in place, usually indicated by the cost to complete the work The true risk to the contractor is the difference between the committed expenditure and the amount they have actually received from the client Neither of these risks is sufficient to warrant draconian measures such as placing a Lien over the site or surrendering title to a company Minimising securities to these risks is in the best interests of the industry, because it will encourage the most work The issue comes down to the timing of the payment If the client pays in arrears as is the current practice, then the contractor requires additional security If the client pays in advance then the client is the party requiring additional security These securities could be provided in the form of bonds, warrantees or insurance The industry would be best served by a system that rewarded contractors with payment in advance, allowing them then the maximum flexibility for the strategic management of their cash flow In return they would have to provide security of performance to the client and their ability to so would be directly related to the strength and quality of their organisation This would place well managed companies at a competitive advantage Such a system would also remove the need for retention to be held against contractors, further freeing the system There are many other factors at work here which are beyond the scope of this discussion It is, however, important to focus in the interaction between the freeing up and international competitiveness of the overall industry and the cost to society as a result of company failures which result from inadequate safeguards in the system For further information about the technical meaning of bonds and guarantees, refer to Davis (1991: Chapter 12) who places these terms within their legal framework This highlights the differences between guarantees and bonds and the different types of bonds such as payment bonds and performance bonds Cash farming: Strategic management of organisational cash flow 261 Legislation Construction industry legislation, commonly called security of payment legislation, is often held forward as a solution to the problems of corporate failure with flow-on damage to subcontractors Such legislation generally provides for rapid resolution of disputes, with pay now resolve later approaches, quick mechanisms for bringing issues to a head rather than deferring until the impact snow-balls Such legislation does not generally proscribe payment terms (neither should it) but rather acts through prompt action in the event of dispute Without determining payment terms, there is no consequence for strategic management of organisational cash flow as this operates within the terms of contracts (except for certain dubious practices) and is not restricted As it acts through resolution of disputes only, such legislation does not address the quietly efficient subcontractor/contractor system which is generally so effective and efficient and which operates predominantly without rancour Legislation will only marginally impact on some of the negative consequences of cash farming, by bringing matters to a head sooner, and thereby reduce the damage Legislation which addresses the risks in the system, by addressing the protection of the gap in the payment system discussed above, provides more protection for the system without risking a reduction in competitiveness CONCLUSION The strategic management of organisational cash flow is one of the most important issues for the long-term viability of a construction company Evidence for the use of cash farming techniques in the building and construction industry has been found in the literature, and the evidence of company failures with the consequential flow-on affects is clear The mechanisms of its operation and the conditions required for successful use have been proposed In practice, cash farming is often a negative influence, however, the positive value of strategic management of cash flow to a well managed and funded organisation empowers a company to be more competitive The organisational cash flow simulation undertaken here showed a clear improvement for an organisation able to separate the inflow and outflow profiles within the contractual relationships This knowledge has implications for change in the industry, and these should be considered prior to any change in policy with respect to the industry, such as the introduction of new legislation Major clients, such as government, should also consider their role in funding the industry, and assess their procurement strategies These issues must necessarily be combined with research into the industry’s supply chains The subcontractors’ and suppliers’ roles in financing the industry should not be under estimated 262 Financing construction REFERENCES Ashley, D B and Teicholz, P M (1977) ‘Pre-estimate cash flow analysis’ Journal of the Construction Division, American Society of Civil Engineers, Proc Paper 13213, 103 (C03): 369–379 Ashman, G B (1994) Security of Payments Melbourne, Victorian Government Publisher Cooke, B and Jepson, W B (1979) Cost and Financial Control for Construction Firms London, Macmillan Davis, R (1991) Construction insolvency London, Chancery Law Publishing Elazouni, A M and Metwally, F G (2000) ‘D-SUB: Decision support system for subcontracting construction works’ Journal of Construction Engineering and Management, 126(3): 191–200 Gyles, R V (1992) Royal Commission into Productivity, Report of the Hearings Part Sydney, State Government of New South Wales Kaka, A P (1996) ‘Towards more flexible and accurate cash flow forecasting’ Construction Management and Economics 14: 35–44 Kaka, A P and Price, A D F (1991) ‘Net cashflow models: Are they reliable’? Construction Management and Economics 9: 291–308 Khosrowshahi, F (2000) ‘A radical approach to risk in project financial management’, in ARCOM Sixteenth annual conference, Glasgow Glasgow Caledonian University, (2) 547-556 Nazem, S M (1968) ‘Planning contractor’s capital’ Building Technology and Management October: 256–260 Punwani, A (1997) ‘A study of the growth-investment-financing nexus of the major UK construction groups’ Construction Management and Economics, 15: 349–361 Tong, Y and Lu Y (1992) ‘Unbalanced bidding on contracts with variation trends in client-provided quantities’ Construction Management and Economics 10: 69-80 Wilson, J N (1976) Contractors’ Liens and Charges, 2nd edition Wellington, Butterworths Authors Index A Akintoye, A Archer, S A Ashley, D.B Ashman, G.B Ashton, W D 23 209 41-42, 169, 171, 180, 186-187, 189-190, 193-194, 196, 198-199, 209, 222, 233, 247-249 232 46 B Balkau, B J Bangert-Drowns, R L Barraza, G A Bathurst, P Bent, J A Berdicevsky, S Berny, J Betts, M Boussabaine, A H Bromilow, F J 30, 42, 52, 61-63, 91, 178 146 133-134 148 131, 133 42, 46, 64-66 42-43, 49, 74, 76-77, 91, 118-120, 122, 157 66-68, 91, 93, 107 43, 50, 85-87, 91 17, 30, 42, 46, 52, 61-72, 78, 91, 93, 111, 138-141, 146-149, 151-157, 171, 177, 217-218 C Casti, J Chan, A P C Cleaver, H L Cooke, B 147, 156 169, 243 85 D Davis, R De Groot, A D Denzin, N K DHSS Drake, B E 33, 244, 256-260 41 3-4 31, 42, 66, 71, 74, 77-78, 83, 85, 109, 117-120 42 264 Financing construction E Ecowin Egan, J Elazouni, A M Employment and Housing Evans, R C 21 197, 256 13 37, 91, 93 F Federal Reserve Ferry, D J Fleming, Q W 20 148 32 G Gates, M Glass, G Goldman, A I Green, J Gyles, R V 146 5-6 14 166, 231-233 H Hardy, J V Henry, J Hillebrandt, P M Hillsdon, B Hoaglin, P C Horman, M J Horner, M Hudson, K W Hutton, J 31, 42, 60, 170 162, 165 13 14 53 146 111 17, 31, 42-43, 46, 71-74, 76-77, 91, 93, 118-119, 122, 157 13-14, 21 I Ireland, V B E Irwin, K 42, 140-141, 147, 149, 151-153 148 J Jepson, W B 31, 49, 61, 171 265 K Kaka, A P Kenley, R Kennedy, W B Kerr, D Khosrowshahi, F Kumaraswamy, M M 17, 42, 50, 87, 91, 93, 105, 114, 118, 120-126, 134, 141, 147, 156, 187-193, 214, 217, 221-222, 233, 248 29, 42-43, 46, 50, 52, 66, 68, 86-87, 91, 93, 99, 116, 118, 120, 122, 146, 148-150, 152, 154, 163, 172, 178, 180-182, 186-187, 193, 199, 208, 210-213, 216, 218-220, 225 17, 30, 41-42, 91 31, 42, 171 17, 40, 43, 79-83, 87-89, 91, 194, 252 140, 142, 147, 155, 157 L Lyons, L C 146 M Mackay, I B Mak, M Y McCaffer, R McElhinney, K Meredith, R R Miskawi, Z 170-171 147 42, 169-171, 180, 207 199, 208 132 43, 83-84, 91 N N.E.D.O Navon, R Nazem, S M Neo, R B Ng, S T Nicholas, J 156 193-194 31, 44, 168-169, 171, 208, 236 171 147, 149, 151, 153 215 P Padman, R Paté-Cornel, M E Peer, S Peterman, G G Peters, G Pilcher, R Punwani, A 41 215 30, 42, 46, 51, 64-67, 91 42, 169, 171, 180 17, 171 61 161, 169, 215, 233, 242 266 Financing construction R Reinschmidt, K F Rescher, N Rubenstein, M F Runyan, W M 42 46 41 S Shipworth, D T Sidwell Sidwell, A C Singh, S Singleton, R R Skitmore Skitmore, M Spirer, H F Stacey, R D 141 42, 74 31, 42, 55, 93 23 50-51, 83, 85, 95 45 107 T Tan, W Tong, Y Trimble, S N Tucker, S N 13, 22 233 169 30, 42-43, 51-52, 61-63, 66, 68-70, 78-79, 91, 178 V Velleman, P F 53 W Walker Warnke, G Warren, C S Weisberg, S Wiener, N C S Wilson, J N Wonnacott, T H 141 212 46 106 260 50-51, 53-54 Y Yeong, C M 141, 143, 147, 149, 151-153, 156 267 Z Zoisner, J 64 General index A a priori 5, 40, 87 Alternative time-cost models 157 Ashley and Teicholz net cash flow model 186 Ashley and Teicholz net present value model 199 Australia 3, 11, 13-16, 18-19, 21-23, 27, 52, 61, 94, 126-127, 138-140, 143, 146-147, 149-150, 152-158, 161, 180, 210, 229, 244, 259 Aware firm 239, 245 B Balance sheet 161, 233, 242, 256 Balance sheet analysis 169 Benchmark 120, 134, 195 Berny and Howes in-project end-date model 119 Berny and Howes model 74 Betts and Gunner model 66 Boussabaine and Elhag model 85 Bromilow model 61 Bromilow time-cost model 137 Building Economist 15, 149 C Calculating cash flow Cash farming Cash flow as cost management Cash flow models compared Claiming to schedule Combining component curves Contract payment terms Control systems Cost/Schedule Control Systems Criteria Cumulative cash flow Cybernetics 94 229, 231, 233, 235, 237, 239, 241, 243, 245-247, 249, 251, 253, 255, 257, 259, 261 39 90 39 174 209-214 107, 109 130 35-36, 140, 197 106-107, 135 270 Financing construction D Deterministic DHSS in-project end-date model DHSS model Distortion module 6, 13, 87, 90-91, 120 118 71 194 E Earned value Empirical Epistemology Experimental models 99, 105, 107, 109, 111, 113, 115, 117, 119, 121, 123, 125-127, 129-135 5-8, 69, 161, 167, 170-172, 203, 208, 231 3-6, 29, 40, 67-68, 90, 146 86 F Factors affecting project duration Forecasting Front-end loading 142 6-7, 16-17, 29, 31, 36-37, 40, 42-43, 60, 62, 71, 73-74, 87, 93-94, 117-118, 126, 129-130, 135, 137, 146, 154, 168, 191 187, 189, 191, 209, 222-223, 247-249, 252 G GRAAD Gross Domestic Product 193-194 11, 137 I Idiographic Increased litigation Inflation Integrated systems Interest rates Internal rate of return International comparisons of time-cost Investment plan Inward cash flow 6, 40-44, 48-49, 53, 56-57, 60-61, 66-67, 85-87, 90 258 11, 13-18, 21-23, 26, 53, 74, 147, 149, 152, 187, 189 114, 134 11, 13-14, 17-19, 21, 39, 161-162, 195, 199-200, 255 199 155 38-39 2, 31-32, 45, 65, 112, 167-171, 174, 177, 180, 182, 184, 200, 205, 209, 218, 221, 252 271 K Kaka and Price net cash flow model Kaka in-project end-date model Kaka's improved net cash flow model Kenley and Wilson model Kenley and Wilson net cash flow model Khosrowshahi model Khosrowshahi net cash flow model Kurtosis modules 187 120 191 41, 46 172 79 194 79-80, 82, 194 L Legislation Logit Logit model Logit in-project end-date model Lorenz curve 3, 165, 261 29, 46-48, 52, 60-64, 66, 69-70, 72-74, 77-78, 82-85, 87, 89, 91, 93-96, 99, 116, 122-123, 125, 172-174, 178, 185, 187, 191, 218 87 122 43 M Malaysia Materials on site Meta analysis of time-cost models Methodology Minimum funds Miskawi model Model Monthly cash flow Multi-variate 126-127, 156-158 190-191, 222 145 3-4, 6, 40-42, 44, 48-49, 56, 60 224-225, 238, 254 83 7, 17, 27, 70, 91, 138, 161, 171, 201, 209, 221-222, 229 33, 209 140 N Navon net cash flow model Net cash flow Net present value New Zealand Nomothetic 193 2, 161, 163, 165, 167, 169, 171, 173, 175-177, 179, 184-185, 187, 189, 191, 193, 195, 197, 199, 201 41, 163, 196, 199 2, 11, 23-24, 241, 259-260 6, 40-44, 49, 53, 56-57, 60, 67, 91, 118, 146, 191 272 Financing construction O Ontology Opportunity cost Optimisation with limited resources Organisatinal cumulative cash flow Organisational cash flow Outward cash flow 3-4, 46, 57 25, 38, 200, 245, 256 197 239, 241-246 1-2, 7, 29, 93, 177, 193, 203-205, 207-209, 214-215, 220, 223, 226, 228, 231, 233, 235-237, 239, 241, 243, 245-247, 249, 251-259, 261 2, 31-32, 44, 112, 162, 167-172, 174, 177, 180, 182, 200, 205, 209, 221, 252-253, 257 P Paradigms Peer model Performance management Periodic cash flow Policy post-hoc Practical cash flow forecasting Prime rate Probability Progress payments Project duration Project value 64 29, 93, 105-107, 109, 131, 195 32-33, 36, 81, 167 2, 205, 208-211, 213-214, 247, 261 6, 61, 66, 73, 125, 185 40 18, 20-22 6, 45, 68-69, 81, 87, 121-122, 133, 188, 216-219 17, 31-34, 36-37, 44, 61, 130, 232, 259 83, 110-111, 117, 122, 125, 137, 140-141, 143, 157, 182, 215, 217, 219 31, 72, 74, 127, 137-138, 154, 199, 215-217, 219, 246 R Rational Real interest Reduced quality Regression analysis Remote monitoring Retention Revised time-cost model Risk Risk & Reward 5-6, 23, 25-26 243, 257 44-46, 49, 52, 57, 171 105, 114, 130, 134 63, 71, 171, 186-187, 190-191, 194, 209-211, 214-216, 221-222 153 2, 21, 34, 37, 49, 122, 187, 191-192, 195, 223, 240-241, 245-246, 249, 251, 256, 259-261 241 273 S S curve SDY Self fulfilling forecast Simulation Simultaneous failures Sing and Phua model Staged cash flow Standard curve Stochastic Surprised firm 36, 43, 62-63, 68, 74, 78-79, 83-85, 137, 140, 176-178 49-50, 52-55, 57-59, 61-67, 70, 73-74, 77, 79, 84-85, 93-94, 96, 98-100, 182-184, 186 39 201, 223 244 78 33 42, 56-57, 89 6, 87, 90-91 239-241, 243-245 T The need for forecasting cash flow Time–cost 37 2, 137-139, 141, 143, 145-149, 153, 155, 157, 159 Transform 46, 48, 95-96, 119, 139, 143, 154, 218 Tucker compound Weibull-Linear model 68 Tucker's single alternative to the DHSS model 78 Turnkey 33-34 Turnover 169, 180, 210-211, 216, 223-226, 233, 238, 244-247, 254 U UK United Nations USA 3, 11, 13, 23-24, 27, 71, 156-157, 169, 202, 229, 262 11, 13 11, 13, 18, 20, 23-24 W Weighted mean delay Work in progress Working capital 169-171, 187-188, 211, 221 31-32, 39, 109, 131, 164, 195, 209, 219-220, 222, 232, 242, 249 2, 25-26, 41, 169, 171, 176, 195, 203, 205, 207, 210, 214-216, 221, 223-224, 226, 229, 232-237, 242, 246-247 .. .Financing Construction Financing Construction Cash flows and cash farming Dr Russell Kenley Professor of Construction UNITEC, New Zealand INSERT Spon... successful property and construction firms, and there I saw a different approach to cash flow management They not only survived the downturn, but thrived xvi Financing construction To me it was... help construction researchers It is a high-level concept that tempts and distracts many research students After all, who does not want to discover a new paradigm at some stage? Financing construction