What type of cash flow curve is characterized by a steep initial section?

A cash flow curve that is characterized by a steep initial section indicates a front-loaded cash flow. In this context, "front-loaded" refers to a situation where the majority of costs or expenditures occur early in the life of a project. This is often the case in construction projects, where initial tasks such as mobilization, site preparation, and procurement of materials require significant capital outlay before any revenue can be generated.

The steep initial section of the curve signifies that as soon as the project starts, substantial cash flow is needed, which can be critical for keeping the project on schedule. This contrasts with other types of cash flow profiles where costs might be spread out more evenly over time or accrue at the end of the project. Understanding the front-loaded nature of cash flow is essential for effective financial planning and ensures that a contractor can meet their financial obligations during the early, often cash-intensive phases of a project.