Budgeting and financial management Books

Book SynopsisA successful design practice requires principals and staff who are creative, technically proficient, and financially savvy. Designing Profits focuses on the last componentthe one that is so elusive for many architects, engineers, and construction professionalsthe business aspects of practice.Not an ordinary book on practice issues or finance, Designing Profits explains the application of design thinking to guide wise business decisions. It is indeed possible to be as creative in establishing and operating a practice as in designing and constructing a building. The book offers comprehensive guidance and objective tools for design professionals to reap financial rewards from their practices, and to discover innovative strategies to become entrepreneurial and implement creative practice models.An extended case study is woven throughout the book. Witness the trials and tribulations of Michelangelo & Brunelleschi Architects as they engage problemTrade ReviewDesigning Profits is a must read for all leaders and managers of Architecture/Engineering/Construction consulting firms. It will be my go-to book for our annual strategic planning preparation. —Mark R. Koblos, President and CEO, KTA Group, Inc.The demands of a viable practice require that design professionals embrace the business management tools and develop the financial judgment that are presented so compellingly in Designing Profits. —Thomas M. Gallas, CEO, CPA, LEED AP BD+C, Torti Gallas + Partners, Inc.Table of ContentsForeword Preface Acknowledgements 1. Brief Overview: Formulating Wise Business Decisions 2. Meet the Firm: Model for Analysis 3. Accounting: Creating Reliable Inputs and Outputs 4. Data Application: Refining Analytics and Controlling Costs 5. Growth and its Constraints: Making Wise Choices 6. Strategic Financial Planning: Setting and Reaching Profit Targets 7. Rethinking Practice: Tactical Innovations for Financial Prosperity and Professional Satisfaction 8. Progress Notes: Wrapping Up and Moving Forward Index

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Book SynopsisThe book will enable readers to understand the purposes of the different budgets andforecasts and it will explain in detail how they are prepared and used. In many casesbudgeting is an important (and often unpopular) part of their job and the book will show them how to do it more effectively and more quickly. It should increase their confidence and develop their management skills. The book will not just focus on the technical sides of budgeting - it will also focus on the softer skills of getting buy-in and navigating company political.Table of Contents : Sunday: Budgeting and forecasting fundamentals : Monday: More budgeting and forecasting fundamentals : Tuesday: Capital expenditure budget and sales and revenue budget : Wednesday: Profit and loss budget : Thursday: Cash budget and budgeted balance sheet : Friday: More about forecasts : Saturday: Monitoring progress against budgets and forecasts

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Book SynopsisThis book addresses ways to provide the highest quality water services at the lowest possible cost, and examines the major finance issues that system managers face. It deals with grants, loans, municipal bonds, tariffs/rates and subsidies, as well as the major government finance programs offered by the Department of Agriculture and the EPA. It also provides managers with the tools to devise innovative financial strategies to make their systems much more efficient. This fully revised edition presents an easy-to-read guide for understanding the myriad options available for financing water and wastewater projects and how to evaluate the most appropriate options.Trade Review"Fundamentals of Water Finance comes at just the right time as sector leaders struggle with how to provide the ratepayer with the most value for their dollar both through the traditional bond market and innovative ways to leverage existing and develop new financing opportunities to spur innovation and technological advances in the water sector. I have always been a fan of Michael Curley’s work and this book is a sterling example of why I will continue to be one. It is my pleasure to recommend this book to anyone in the water industry seeking to learn more about water project finance." —Adam Krantz, National Association of Clean Water Agencies, Washington, DC, USA"Michael Curley is one of the nation’s leading experts on environmental finance and a nimble, creative thinker who argues, forcefully, for a refocusing on the premier challenges to water quality in the 21st century: nonpoint source pollution or unregulated runoff from farms and everything else human beings do across the landscape." —Tracy Mehan, American Water Works Association, Denver, Colorado, USA"As we confront today the costly, critical challenge of repairing water lines, treatment plants, and related facilities, as well as of addressing serious, ongoing problems associated with non-point source pollution, Michael Curley does the country a great service explaining options, choices, and new approaches in his timely, well-written primer on financing the infrastructure needed to provide Americans the clean water essential for life and so many other purposes." — William K. Reilly, U.S. Environmental Protection Agency, 1989-93, Washington, DC, USATable of ContentsFinancial Mechanics. Types of Debt. Accounting & Disclosure. Subsidies & Affordability. Tariffs (Rates). Impacts of Conservation. Municipal Bonds. Rating Agencies. Regulation. Municipal Bond Insurance. Other Credit Enhancement Strategies. Government Programs. Public/Private Partnerships (PPPs). Commercial Banks. Hidden and Not-So-Hidden Costs. Professional Associations. Sources of Good Financial Information. Coming Trends.

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Book SynopsisYour business plan: turn ten minutes of attention into investment.''David''s book is an invaluable resource for any entrepreneur seeking to raise funding. Based on years of experience, David shows how to keep things short and clear!'' -- Thomas Hellmann, Professor of Entrepreneurship and Innovation, Saïd Business School, University of Oxford''Anyone interested in this subject should read this book,'' -- Tim Hames, Director General of BVCA (British Venture Capital Association)The Business Plan is an essential tool for attracting an investor's attention. They receive hundreds of plans every week and spend no more than ten minutes on each one before deciding if it is of further interest. This means that the plan needs to be a short, snappy document that conveys the facts about your business quickly and clearly.David Bateman''s template has developed through years of successful deals and in just 15 slides, with just a few sentences on each, it provides everything an investor needs to know. No more long business plans full of text this is a ''one-size-fits-all'' solution avoids confusion and keeps it simple but successful.Business Plans That Get Investment is a clear and comprehensive guide to writing a plan that turns those ten minutes of investor attention into major investment deals.

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Book SynopsisBook 4 of the Smart Skills series: practical guides to mastering vital business skills and techniques. Using proven strategies from business experts, these essential smart skills can empower anyone with the tools to get ahead.A practical and accessible guide to the numerical skills needed to excel in business.Whatever your business or technical background, having a sound grasp of finance empowers you to make more informed and confident strategic and operational decisions. Those with a good understanding are also more likely to be involved in strategically important projects, facilitating career advancement or any role where scrutiny of budgets or contracts is required.This book is designed to give any professional from a non-financial background the skills and confidence to add that critical financial dimension to their skillset. Quickly and accurately read and interpret accounts, including forecasts, balance sheets, and profit and loss reports Understand the difference between revenue, profit, cash flow, overhead and margin to make better financial decisions and producebudgets and forecasts with confidence Effectively communicate financial performance to your management or employees Whether you are an entrepreneur with a great business idea but no idea how to explain your plans to potential investors, or a marketing professional hoping to understand accounting jargon in your financial reports, this Smart Skills guide can give you the skills and knowledge you need to succeed in business, with no need for an expensive or lengthy course in finance.

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Book SynopsisCrowdfunding's time has arrived! Through the power of the Internet, it represents one of the most exhilarating ways to raise investment funds for your dream project. It enables you to get exposure in the public domain and can mean a seal of approval being given to your ideas by the masses. Developed from crowdsourcing - where people get together to generate ideas and solve problems - crowdfunding is an extension of this, only now the crowd add money (funding) to a project. It offers investment solutions to project needs in all sorts of fields, from apps to zoos. This book provides unrivalled explanations and frameworks to help any entrepreneur or business to prepare and execute a successful crowdfunding campaign and raise the capital they need. It contains expert insights and advice from the major players in the sector, including the leading crowdfunding sites, on how success can be achieved.Table of ContentsChapter 1: FOUNDATIONS 1.1 Crowdsourcing 1.2 Crowdfunding Paths & Models Personal Finance: long versus short / Unique Features / Project Finance / Donation / Reward / Equity / Interest / Mixed 1.3 Crowdfunding's Dark Side Cards on the table / IP on the table / Business model on the table / Time to campaign / Time to talk (or not) / Taxing issues / Accounting for things / Risky young things / Riskier young things / You are the one / Equity Worries / Fraud 1.4 Campaign STEEPLED 1.5 Motivations Case-in-point 1.6 Campaign Strategy claritycrowd.com 1.7 Project Planning Vision / Values / Network / Channels / Promises / Measurement / Success / Clarity / Operations / Timelines / Planning - SWOT Analysis / Planning - TOWS Analysis / Planning - Critical Path / Planning - SMART Aims Chapter 2: GETTING READY 2.1 Scope 2.2 Research Researching Tribes / Ties / Auditing Other Campaigns / Auditing Your Campaign / Research Summary 2.3 Promises Match / Promise / Deliver / Types of Promise / Budgeting 2.4 Team Team Essentials 2.5 Aims and Objectives 2.6 Responsibilities 2.7 Project Crowdfunding Models Donation / Reward / Equity / Interest / Mixed 2.8 Choosing a Platform 2.9 Social Media Chapter 3: ENGAGE 3.1 Target Users 3.2 Product or Service? 3.3 Rewards Stretch Goals / Buzz 3.4 The Story Knowledge Capture 3.5 The Sales Message 3.6 Scripts Hook / Main Page / Press / Video / Updates / Basic Social Media / Facebook / FourSquare / Google+ / Instagram / LinkedIn / Pinterest / Quora / Redditt / Tumblr and Blogger / Twitter / Final word 3.7 Active Sentences 3.8 The Media Outpour 3.9 Over Target Chapter 4: GETTING STARTED

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Book SynopsisThis volume demonstrates show cost analysis can be adapted to MEMS, taking into account the wide range of processes and equipment, the major differences with the established semiconductor industry, and the presence of both large-scale, product-orientated manufacturers and small- and medium-scale foundries. The content examines the processes and equipment sufficiently for the reader to appreciate how costs arise. It examines representative costs are examined in sufficient detail and accuracy for specific equipment, processes, products, or foundries to show how financial models can be introduced to estimate the cost and price for a MEMS product.Table of ContentsThe World of MEMS; Chapter 2: Basic Fabrication Processes; Chapter 3: Surface Microengineering. High Aspect Ratio Microengineering; Chapter 5: MEMS Testing; Chapter 6: MEMS Packaging. Clean Rooms, Buildings and Plant; Chapter 8: The MEMSCOST Spreadsheet; Chapter 9: Product Costs – Accelerometers. Product Costs – Microphones. MEMS Foundries. Financial Reporting and Analysis. Conclusions.

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Book SynopsisCost-benefit analysis is a widely used governmental evaluation tool, though academics remain skeptical. This volume gathers prominent contributors for discussion of cost-benefit analysis, specifically its moral foundations, applications and limitations.

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Book SynopsisGovernment spending has increased in the United States since World War II despite the many rules intended to rein in the insatiable appetite for tax revenue most politicians seem to share. This book explains why these budget rules tend to fail, and proposes alternatives for imposing the fiscal discipline on our legislators.Trade Review"There are no other books on budgeting that approach this level of insight or breadth. Rules and Restraint is a fine, and finely crafted, book that will go right to the top of the list of standard textbooks for classes and references for practitioners." - Michael Munger, Duke University"

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a huge range and FREE tracked UK delivery on ALL orders.

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a huge range and FREE tracked UK delivery on ALL orders.

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Book SynopsisCatastrophic risk is one of the most significant and challenging areas of corporate risk management. Analyze this risk for your company with Catastrophic Risk and make sure you have sufficient resources to absorb losses and avoid financial distress. The first comprehensive volume to address this topic from a financial perspective, this book is a guide to the worst financial risks threatening companies and industries today. Author Eric Banks begins with a consideration of ?catastrophe? and its mplications, looks at the state of actuarial and financial modelling of catastrophe risks, and discusses the creation of a risk management framework that will enable the efficient and secure management of exposure. Catastrophic Risk is essential reading if you''re a corporate treasurer, CFO, or insurance/financial risk manager responsible for corporate risk management. Order your copy today.Trade Review"...useful to have at hand...Risk, of whatever nature, remains something that needs to be addressed at all times." (Accounting Technician, August 2005) “It is a beautifully clear book…enlightening… one which turns a complex and potentially off-putting subject into a remarkably interesting one.” (Strategic Risk, June 2007)Table of ContentsAcknowledgments ix About the author xi PART I IDENTIFICATION AND ANALYSIS OF CATASTROPHIC RISK 1 1 Catastrophe and Risk 3 1.1 Introduction 3 1.2 The nature of catastrophe 5 1.2.1 A definition 5 1.2.2 Frequency 5 1.2.3 Vulnerability 8 1.2.4 Measuring severity 11 1.3 The scope of impact 11 1.4 Catastrophe and the risk management framework 13 1.5 Overview of the book 15 2 Risk Identification I: Perils 17 2.1 Natural catastrophe 18 2.1.1 Geophysical 19 2.1.2 Meteorological/atmospheric 22 2.1.3 Other natural disasters 26 2.2 Man-made catastrophe 29 2.2.1 Terrorism 29 2.2.2 Industrial contamination 31 2.2.3 Technological failure 32 2.2.4 Financial dislocation 33 2.3 Mega-catastrophe and clash loss 34 3 Risk Identification II: Regional Vulnerability 35 3.1 Spatial impact of natural catastrophes 36 3.1.1 Bermuda and the North American Atlantic Coast 36 3.1.2 Florida 36 3.1.3 North American West Coast 37 3.1.4 US Great Plains/Midwest 38 3.1.5 Caribbean 39 3.1.6 Mexico 39 3.1.7 Japan 40 3.1.8 South Asia/Southeast Asia 41 3.1.9 Middle East/Near East 43 3.1.10 Europe 43 3.2 Spatial impact of man-made catastrophes 44 3.2.1 North America 46 3.2.2 Europe 47 3.2.3 Asia/Pacific 47 3.3 Urban vulnerabilities 47 4 Modeling Catastrophic Risk 49 4.1 The development and use of models 49 4.2 The goals of catastrophe modeling 50 4.3 General model construction 51 4.3.1 Phase one: Hazard/peril assessment 52 4.3.2 Phase two: Vulnerability assessment 55 4.3.3 Phase three: Contract assessment 59 4.3.4 A general example 60 4.3.5 Other perils 63 4.4 Challenges 64 4.4.1 Model characteristics and assumptions 65 4.4.2 Model validation 66 4.4.3 Tail risks 67 4.4.4 Data quality and granularity 67 PART II MANAGEMENT OF CATASTROPHIC RISK 69 5 Catastrophe and the Risk Management Framework 71 5.1 Active risk management 71 5.1.1 Enterprise value, liquidity, and solvency 72 5.1.2 Loss control, loss financing, and risk reduction 74 5.2 Risk monitoring 81 5.3 Private and public sector efforts 82 5.4 Sources of capital 83 5.4.1 Insurers/reinsurers 83 5.4.2 Investment funds 84 5.4.3 Financial institutions 85 5.5 Toward active risk management 85 6 Catastrophe Insurance and Reinsurance 87 6.1 Insurable risk and insurance 87 6.1.1 Full insurance 88 6.1.2 Partial insurance 88 6.1.3 Captives 89 6.2 Catastrophe insurance 89 6.3 Reinsurance 92 6.3.1 Facultative and treaty reinsurance 92 6.3.2 Proportional and excess of loss agreements 93 6.4 Catastrophe reinsurance 95 6.5 Market cycles 98 6.6 Internal risk management 101 6.7 Challenges 103 6.7.1 Pricing difficulties 103 6.7.2 Earnings and capital volatility 104 6.7.3 Concentrations 106 6.7.4 Limits to insurability/uninsurable risks 106 6.7.5 Lack of insurance/reinsurance penetration 107 6.7.6 Capacity constraints 107 6.7.7 Contagion effects and systemic concerns 108 7 Catastrophe Bonds and Contingent Capital 111 7.1 Overview of securitization 111 7.2 Catastrophe bonds 112 7.2.1 Standard structures 112 7.2.2 Innovations 120 7.2.3 Market focus and direction 123 7.3 Contingent capital 124 7.3.1 Standard structures 125 7.3.2 Contingent debt 126 7.3.3 Contingent equity 128 7.4 Challenges 131 7.4.1 Structural flaws 132 7.4.2 Regulatory differences 132 8 Catastrophe Derivatives 135 8.1 Overview of derivatives 135 8.1.1 Exchange-traded derivatives 136 8.1.2 OTC derivatives 137 8.2 Exchange-traded catastrophe derivatives 139 8.3 OTC Catastrophe derivatives 140 8.3.1 Catastrophe reinsurance swaps 140 8.3.2 Pure catastrophe swaps 142 8.3.3 Synthetic OTC structures 142 8.4 Challenges 144 8.4.1 Index construction and basis risks 144 8.4.2 Lack of contract transparency 144 8.4.3 One-way markets 145 8.4.4 Pricing difficulties 145 8.4.5 Regulatory barriers 145 9 Public Sector Management and Financing 147 9.1 Forms of public sector involvement 147 9.1.1 Ex ante loss control measures 147 9.1.2 Insurance/reinsurance 148 9.1.3 Ex post crisis management 156 9.1.4 Financing and subsidies 157 9.1.5 Financial regulation 158 9.2 Challenges 159 9.2.1 Voluntary versus mandatory measures 159 9.2.2 Public and private sector responsibilities 160 9.2.3 Lack of market access and capacity 161 10 Outlook and Conclusions 163 10.1 Loss control 163 10.1.1 Loss control implementation 163 10.1.2 Enforcing urban planning 163 10.2 Quantification 164 10.2.1 Modeling requirements 164 10.2.2 Transparency 164 10.2.3 Complexity of terrorism 165 10.3 Loss financing 165 10.3.1 Vulnerabilities and risk capacity 165 10.3.2 Discriminatory funding and insurance 166 10.4 Government participation 166 10.4.1 Optimal government role 166 10.4.2 Limited government resources 167 10.4.3 Adverse incentives 167 10.4.4 Market deregulation 168 10.5 General management 168 10.5.1 Sub-optimal management 168 10.5.2 Sustainability of solutions 169 10.5.3 Preparing for the mega-catastrophe 169 10.5.4 Amalgamated solutions 169 10.5.5 Learning from past events 170 Bibliography 171 Index 175

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Book SynopsisAs the industry environment transforms from a completely regulated setting to a broader, deregulated marketplace, new market participants must understand planning and operations of power systems to effectively participate in markets.Trade Review"…'an ideal reference for professionals and private service sectors.' Thus it is for power industry professionals." (CHOICE, September 2007) "...a comprehensive book by an insider..." (Electrical Apparatus, July 2007)Table of ContentsPreface xi Acknowledgments xv Figure Citations xvii About the Author xix 1. Overview 1 1.1 The Power Delivery Chain in a Vertically Integrated Utility 1 1.2 The Power Delivery Chain in a Market Environment 3 2. Energy, Load, and Generation Technologies 7 2.1 Energy, Power, and their Measurements 7 2.2 Load 14 2.3 Generation Technologies 21 3. The Grid 49 3.1 Fundamentals: Load, Generation, and Alternating Current 49 3.2 Grid Equipment 56 3.3 Grid Reliability and Contingency Requirements 64 3.4 Grid Configuration 67 3.5 Grid Operations 72 3.6 Blackout August 14, 2003 76 4. Short-Term Utility Planning 81 4.1 Planning and Execution of Dispatch: Day-Ahead Planning Through Real-Time Delivery 81 4.2 Day-Ahead Demand Forecasting: Load and Ancillary Service Requirements 84 4.3 Least-Cost Dispatch in a Single Control Area: A Simple Model 89 4.4 A Solution Using Profit Maximization 95 4.5 Least-Cost Dispatch in a Single Control Area with Operating Constraints 99 4.6 Least-Cost Dispatch in a Single Node with Spinning Reserve and Regulation 111 4.7 Least-Cost Dispatch in a Network 113 4.8 Real Time 120 5. Long-Term Utility Planning 122 5.1 Project Development 122 5.2 The Planning Process 127 5.3 Long-Term Load Forecasting 129 5.4 A Simplified Look at Generation Capacity Additions 131 5.5 Generation Additions and Retirements Within a Single Control Area 143 5.6 Generation Additions and Retirements with Transmission to a Single Control Area 147 5.7 Generation Additions and Retirements and Transmission Additions Within a Network 148 5.8 Reserve Reuqirements 151 6. Midterm Utility Planning 152 6.1 Informational Requirements 152 6.2 Formulation of the Optimization Problem 156 7. A Market Environment 161 7.1 Principles and Architecture 161 7.2 Short-Term Market Design: Day-Ahead Scheduling Through Real-Time Delivery 164 7.3 Long-Term Market Design: No Clear Solutions 170 7.4 Midterm Market Design 173 8. Asset Management in Short-Term Markets 180 8.1 Retailers 180 8.2 Power Producers 183 8.3 Integrated Energy Companies 189 9. Investment Analysis: Long-Term Planning in a Market Environment 192 9.1 Investment Setting in Utility and Market Environments 192 9.2 Project Analysis for a Merchant Plant 193 9.3 Power Purchase Agreements (Long-Term Contracts) 202 10. Risk Management in the Midterm Markets 211 10.1 Retailer Risk 211 10.2 Power Producer Risk 214 10.3 A Quick Risk Primer in Statistics for Risk Management 215 10.4 Risk Management in Midterm Markets: Retailers 229 10.5 Risk Management in Midterm Markets: Power Producers 252 10.6 Risk Management in Midterm Markets: Integrated Electricity Suppliers 274 11. The California Experience 278 11.1 Market Fundamentals 279 11.2 Short-Term Market Structure: The CALPX, CAISO, and Other Market Participants 281 11.3 Fatboy, Get Shorty, Ricochet, and Death Star 286 11.4 Market Contrast: PJM and California 288 Bibliography 291 Index 294

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Book SynopsisWritten in an approachable style with short sections, visual icons and navigation aids, numerous bulleted lists and summary tables, and the use of graphical representations where appropriate to illustrate the text.Table of ContentsPreface ix 1 INTRODUCTION 1 The Big Paradox 1 What Is Financial Management? 2 First Stop: Financial Accounting 2 Why Construction Accounting Is Different from Accounting in Other Business Sectors 4 Who Is at Risk? 5 Projects: The Output of the Construction Process 6 Project-Level Controls 7 Time Value of Money 8 Entrepreneurial Issues 8 Review Questions and Exercises 9 2 UNDERSTANDING FINANCIAL STATEMENTS 11 Introduction 11 Why Should You Care about Accounting? 12 Generally Accepted Accounting Principles 12 Cash and Accrual Bases: Two Ways to Look at Accounting 13 Cash Basis of Accounting 14 Accrual Basis of Accounting 15 Accounts 16 Account Hierarchy 16 Financial Reports 17 Bookkeeping 19 The Balance Sheet 20 Balance Sheet Layout 21 Balance Sheet Account Categories in Detail 21 The Fundamental Accounting Equation 22 Asset Values 23 The Fundamental Equation and Owners’ Risk 24 Balance Sheet for Fudd Associates, Inc. 24 Key Accounts 26 The Income Statement 29 Components of an Income Statement – More Details 32 The Statement of Cash Flows 35 Contract Backlog 37 Public Corporations 38 Review Questions and Exercises 39 3 ANALYZING COMPANY FINANCIAL DATA 43 Introduction 43 Vertical and Horizontal Analyses 44 Vertical Analysis: Financial Ratios 44 Liquidity Indicators: Can This Company Get Cash in a Hurry? 45 Current Ratio 45 Quick Ratio 46 Working Capital 47 Profitability Indicators: Is This Company Making Enough Profit? 48 Return on Equity 48 Return on Revenue 50 Return on Assets 51 Earnings Per Share 51 Efficiency Indicators: How Long Does It Take a Company to Turn over Its Money? 52 Average Age of Inventory 53 Average Age of Accounts Receivable (Collection Period) 55 Average Age of Accounts Payable 56 Other Average Ages 57 Operating Cycle 57 Turnover Ratios 58 Revenue to Assets Turnover 58 Capital Structure Indicators: How Committed Are the Owners? 59 Debt to Equity 60 Assets to Equity (Leverage) 60 Other Indicators 60 Horizontal Analysis: Tracking Financial Trends 62 Time Series Graphs 62 Index-Number Trend Series 63 Conclusion 63 Review Questions and Exercises 64 4 ACCOUNTING BASICS 71 Introduction 71 Transaction Processing 71 Journalizing the Transaction 73 A Transaction to Enter Initializing Capital 74 A Vendor Billing Transaction 74 A Billing to the Client 76 Posting Entries to the Ledger 78 Relationship of Work-in-Progress and Revenue/Expense Accounts 80 Closing the Accounting Cycle 82 Recognition of Income 83 Percentage-of-Completion Method of Income Recognition 83 Completed-Contract Method of Income Recognition 85 Transactions during a Period 86 Posting to the General Ledger during the Accounting Period 88 Closing Actions at the End of the Period 91 Review Questions and Exercises 93 5 PROJECT-LEVEL COST CONTROL 97 Objectives of Project-Level Cost Control in Construction 97 Unique Aspects of Construction Cost Control 98 Types of Costs 99 The Construction Estimate 99 Cost Control System 101 Building a Cost Control System 101 Cost Accounts 103 Cost Account Structure 104 Project Cost Code Structure 106 Cost Accounts for Integrated Project Management 110 Earned Value Analysis 113 Labor Data Cost Collection 122 Review Questions and Exercises 125 6 FORECASTING FINANCIAL NEEDS 129 Importance of Cash Management 129 Understanding Cash Flow 129 Retainage 131 Project Cost, Value, and Cash Profiles 131 Cash Flow Calculation—A Simple Example 133 Peak Financial Requirements 136 Getting Help from the Owner 137 Optimizing Cash Flow 138 Project Cash Flow Estimates 141 Using Software for Cash Flow Computations 144 Company-Level Cash Flow Planning 145 Strategic Cash Flow Management: “Cash Farming” 145 Project and General Overhead 146 Fixed Overhead 148 Considerations in Establishing Fixed Overhead 149 Breakeven Analysis 151 Basic Relationships Governing the Breakeven Point 154 Review Questions and Exercises 155 7 TIME VALUE OF MONEY AND EVALUATING INVESTMENTS 161 Introduction 161 Time Value of Money 162 Interest 162 Simple and Compound Interest 163 Nominal and Effective Rate 165 Equivalence and MARR 166 Discount Rate 167 Importance of Equivalence 167 Inflation 168 Sunk Costs 169 Cash Flow Diagrams 169 Annuities 171 Conditions for Annuity Calculations 173 Calculating the Future Value of a Series of Payments 174 Summary of Equivalence Formulas 175 Worth Analysis Techniques: An Overview 176 Present Worth Analysis 179 Investments with Different Life Spans 180 Equivalent Annual Worth (EAW) 181 Internal Rate of Return 183 Limitations of the IRR Method 185 An Example Involving Cost Recovery 186 Comparison Using EAW 188 An IRR Example—Owner Financing Using Bonds 191 Review Questions and Exercises 194 8 CONSTRUCTION LOANS AND CREDIT 199 Introduction 199 The Construction Financing Process 200 A Sample Developmental Project 202 The Amount of the Loan 204 How Is the Cap Rate Determined? 205 Mortgage Loan Commitment 206 Construction Loan 206 Commercial Lenders 208 Lines of Credit 209 Interest Paid on Outstanding Balance 210 Commitment Fees 211 Compensating Balances 211 Clean-Up Requirement 212 Collaterals 212 Accounts Receivable Financing 213 Trade Credits 213 Long Term Financing 215 Loans with End-of-Term Balloon Payments 216 Review Questions and Exercises 218 9 THE IMPACT OF TAXES 219 Introduction 219 Types of Taxes 220 Income Tax Systems 221 Alternatives for Company Legal Organization 221 Sole Proprietorships 222 Partnerships 222 Corporations 222 Limited Liability Partnerships and Companies 223 Other Options 224 Taxation of Business 224 Business Deductions in General 227 Taxable Income: Individuals 227 Itemized Deductions, Standard Deductions, and Personal Exemptions 228 The Tax Significance of Depreciation 229 Calculating Depreciation 230 Straight Line Method 231 The Production Method 232 Depreciation Based on Current Law 233 Marginal Tax Rates 235 Tax Credits 238 Tax Payroll Withholding 239 Tax Payment Schedules 239 Marginal, Average, and Effective Tax Rates 239 Net Operating Losses 240 Taxes on Dividends and Long-Term Capital Gains 242 Alternative Minimum Tax 242 Summary 243 Review Questions and Exercises 243 APPENDIX A TYPICAL CHART OF ACCOUNTS 247 APPENDIX B FURTHER ILLUSTRATIONS OF TRANSACTIONS 251 APPENDIX C COMPOUND INTEREST TABLES 275 References 301 Index 305

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