Lump sum

Lump Sum contract contractor manages and executes specified work to an agreed delivery date for a fixed price. Penalties may be due for late completion of the work, and this provides an incentive for timely completion. Payment may be staged when agreed milestones are reached. 

Lump sum contracts tend to be favoured by companies awarding work (if the scope of work can be well defined) as they provide a clear incentive for the contractor to complete a project on time and within an agreed price. 

If the reference date is set at the beginning of the year (e.g. 1.1.98) then full year discount factors imply that t is a whole number and that cashflows occur in lump sums at the end of each year. If the cashflow occurs uniformly throughout the year and the reference date is the beginning of the year then mid-year discount factors are more appropriate, in which case the discounting equation would be ... 

Relationship between (PBP) and (DCFRR) For the case of a single lump-sum capital expenditure Cpc which generates a constant annual cash flow Acf in each subsequent year, the payback period is given by the equation... 

Pauschal-. total, lump (sum, etc.), pauscheu, v.t. swell (Metal.) refine. 

Bid forms, which will include provision for the bidders to submit a lump sum bid, or a rate for labor and materials, or both ... 

Lump sum fixed price. This is the most commonly used method, and ensures that the client will know exactly how much he will be paying ... 

Lump sum fixed price with a schedule of rates to cater for variations to the works ... 

Bills of Quantities - The client can require a successful bidder to supply a priced-up bill of all items bided for within a certain time after being requested to do so. This is useful in a lump sum contract where variations to the contract occur. The bidder in this case provides the bill. 

In a lump sum contract the contractor does not have a common law right to interim payments. Most larger contracts have an express term within them giving the right to interim payments, or payments on account, notwithstanding that they have not fulfilled their contractual duties in completing the works. The matter of interim payments and their frequency should be resolved before the contract is signed, and not left until a dispute arises. 

If the process used has not been developed exclusively by the operating company, royalties and licence fees may be payable. These may be paid as a lump sum, included in the fixed capital, or as an annual fee or payments based on the amount of product sold. 

This is a small plant compared to many chemical complexes, so where lump sums were given the minimum price was used. 

Royalties are the costs paid to the owners of patents for using their inventions or processes. These are agreed upon in advance and usually amount to around 5/ 1,000 lb (500 kg) of product produced. There are also lump-sum royalties, where for a stated amount, which is paid only once, all rights to use the invention or process are given to the leasee. 

In the life insurance annuity a person contributes equal amounts over a number of years, and then at a given age (assuming he has not died previously) he receives a lump sum of money or some other form of payment. To determine how this compares with other forms of investment, the investor must determine at what interest rate his money would need to be invested in order to earn that lump sum in the same period of time. The first payment would earn compound interest for n periods. The second payment, which is made at the end of the first period, would earn interest for (n - 1) periods. The general rule is that each payment earns interest for one less period than the proceeding one. This can be expressed as... 

Pv is the present value, or the lump-sum amount that a series of future ullllf... 

K 66.4 million in a lump sum (includes payments to ANDA filer and its raw material manufacturer) 9 years, 5 months Less than 100 million (year after agreement)... 

Contract Type Typically Reimbursable Typically Lump Sum... 

According to the vendor, pricing is relative to factors including the size of the job and the nature of the treatment as well as the financial arrangements, whether they be lump sum, cost plus, or other (personal communication John T. Corcia, Stablex, 1997). 

Figure 3 Inelastic and elastic cross sections for electron impact excitation of the water molecule the data are from the review by Mark et al. [19]. The total interaction cross section ctt was determined from the sum of cross sections for all elastic and inelastic processes. Inelastic channels include the vibrational modes Cvi (the bending mode with threshold 0.198 eV), cTv2 (the sum of two stretching modes with thresholds 0.453 and 0.466 eV), and CvS (a lump sum of other vibrational excitation modes including higher hormonics and combinational modes with an assigned threshold of 1 eV). The electronic excitations and <7 2 have threshold energies of 7.5 and 13.3 eV. Ionization cross sections are those of Djuric et al. (O), and Bolarizadah and Rudd ( ). (From Ref 19.)...

You have your eye on a new powerboat — one that seats up to 12 people and moves fast enough to pull a skier. You figure that the boat you want will cost close to 100,000 when you re ready to buy it. You re going to put away a lump sum of money today, and let it grow in value for ten years — at which time you ll take all the money and the interest to buy the boat. 

In theory, this can be achieved by "lump-sum taxation." in which people are assessed a tax that is independent of how much they work and earn. Under this scheme, they have no reason to work less since they retain the full income of each additional hour of work. 

For example, commission salespeople get paid in clumps Make a big sale, get a big paycheck. Freelance writers, artists, and consultants are paid in similar lump-sum fashion. The person starting a business has periods of clumplike payment, although after companies get underway, they themselves may be divided into dumpish and tricklish types of companies. 

Profit Sharing/Thrift Plans 401 (k) and/or 403(b) Plans Employee Stock Ownership Plans Lump Sum Pension Benefits... 

Flores, Dan L. The Retirement Revolution A Strategic Guide to Understanding and Investing Lump-Sum Distributions from Qualified Plans (Kosciusko, MS Writers Advantage, 2003). 

More important than abatement investment (in financial terms) is the free allocation of allowances to firms. This is equivalent to a fixed, lump-sum revenue transfer to the firm, because the revenue that the company could generate from selling these allowances is independent of its own production volumes. 

The implications from this are that firms should be expected to maximize the dual objectives of profits and sales if (1) managers are powerful relative to shareholders, or (2) the market structure is oligopolistic and quantity leadership provides a profit advantage. It follows that managers might find it optimal to use the lump sum represented by their grandfathered allowances as a war chest with which to reduce prices and increase sales in the output market, in an attempt to take Stackelberg leadership, as outlined earlier. 

The authors are aware of this limitation and write (Reilly and Paltsev, 2005, p. 11) We also cannot estimate the potential distortionary effects of non-lump sum distribution of some of the permits (those that under some countries NAPs are retained for new entrants). ... 

Multiply equipment quotes received from suppliers by these factors to obtain approximate installation costs. Based on lump-sum contract labor and materials. 

Expenditures prior to startup. The expenditures prior to startup can be placed in two categories (1) those that occur uniformly over the period of time before startup and (2) lump-sum payments that occur at some point before the startup time. 

Construction costs are generally assumed to be disbursed uniformly between the start of construction and the startup time, although equivalent results can be obtained if they are considered to be a lump-sum disbursement taking place hallway between the start of construction and startup. The present worth of construction costs that are assumed to occur uniformly over a period of years T prior to startup can be calculated using either continuous interest compounding or discrete (annual) interest compounding. 

The cost of the land is a lump-sum disbursement and, in the equation given, it is assumed that the land payment coincides with the start of construction. If the disbursement is made at some other time, then the proper value should be substituted for T. 

The tree-growth concept, as shown in Fig. 6-1, depicts a trunk output to start the particular industrial operation designated as the total capital investment. This total capital investment includes all the funds necessary to get the project underway. This encompasses the regular manufacturing fixed-capital investment and the working-capital investment along with the investment required for all necessary auxiliaries and nonmanufacturing facilities. The cash flow for the capital investments can usually be considered as in a lump sum or... 

Maintenance and repairs Operating supplies Laboratory charges Royalties (if not on lump-sum basis)... 

The fundamental relationships dealing with continuous interest compounding can be divided into two general categories (1) those that involve instantaneous or lump-sum payments, such as a required initial investment or a future payment that must be made at a given time, and (2) those that involve continuous payments or continuous cash flow, such as construction costs distributed evenly over a construction period or regular income that flows constantly into an overall operation. Equation (12) is a typical example of a lump-sum formula, while Eqs. (23) and (25) are typical of continuous-cash-flow formulas. 

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