Sensitivity analysis of the contractor’s financial effects achieved on a single building site

Abstract

Based on catalogues, the time schedule of erecting multi-storey building has been prepared. Real current conditions and the average cost of the building allows for creating the model where four variables influence NPV and maximum cash demand of a contractor erecting the building. The simulation made in the spreadsheet is the base for calculating and presenting the sensitivity analysis of each variable separately, as well as, for creating the surface chart where the joint influence of terms of payments affects the maximum demand for cash. The way of using of this chart has been described aiming at the protection of the contractor from losing financial liquidity while the profi table project is executed.

Keywords

• sensitivity analysis
• financial effects
• construction site
• NPV
• cash flow
• terms of payment
• profit