Business FinancesQuestion 45 of 1605
Cash flow problems in contracting most commonly occur when:
a.Revenue is received after costs must be paid
b.Overhead is too low
c.A project completes ahead of schedule
d.Equipment is fully depreciated
Explanation
Cash flow gaps arise when contractors must pay workers, suppliers, and subcontractors before receiving payment from the client. Managing payment schedules and draw requests is critical.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)