- This topic has 5 replies, 2 voices, and was last updated 6 years ago by
John Moffat.
John Moffat.-
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stafano
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Hi John
The question states that it is “now 1 December 2003”
Construction starts 31 December 2004.
1) So December 2004 is Time 1 and December 2003 is Time 0, Why is this the case? it is 13 months between the two dates?
Is it because of that one extra month we have time 0 for 2003 and time 1 for 2004
2) What if the question stated “now 1 January 2004” would this make the construction on December 2004 Time 0?
John Moffat
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Although now is 1 December, all that happens now is that ‘you have been hired as a consultant’.
The hotel is being built over the 12 months to 31 December 2004, and so it starts on 31 December 2004 (or if you prefer 1 January 2004 – for discounting purposes they are the same day) and this has been taken therefore as time 0.
You will never be expected to discount for months – only in years.
stafano
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Thanks John,
1) Do you mean 1 December 2003/1 January 2004 is Time 0?
2) So because it is 12 months away 31 December 2004 is Time 1 and this is the same logic used to do the timing in Seal Island 6/10?
3) if the Blipton International question stated that it is now 31 December 2004 instead of 1 December 2003 we would have it as time 0?
John Moffat
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1) Sorry I mistyped. I meant to type 31 December 2003 / 1 January 2004 is time 0. Then is when the project starts.
2) Yes
3) Time 0 is when the project starts.
stafano
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Ok Think I get it.
For Seal Island(6/10)
Construction started Jan 2002 which is start of the year so Time 0
Year end 2002 cost of 300 is Time 1 this is because it is at the end of the yearFor Blipton
It does not state the project start date all it says is it is now December 2003 so you assume the poriject started 31 December 2003/Jan 2004 both of which means Time0
Year Ended December 2004 is time 1
Please let me know if the above two reasoning is correct?
Kind Regards,
John Moffat
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Yes – what you have written is correct 🙂
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