The following points highlight the seven main methods used in determination of cash flow from business activities of a firm. The methods are: 1. Payback Period Method 2. Accounting Rate of Return Method 3. Net Present Value Method 4. Internal Rate of Return (IRR) Method 5. Profitability Index (PI) Method 6. Discounted Payback Period Method 7. Terminal Value Method. 1. [...]
This article provides a study note on Cash Flow for Investment Analysis:- 1. Conventional and Non-Conventional Cash Flows 2. Incremental Cash Flows 3. Determination. Conventional and Non-Conventional Cash Flows: When an initial cash outlay (outflow) is followed by a series of cash inflows of uniform or unequal amounts, it is called conventional cash flows. Most of the capital investment decisions [...]
This article throws light upon the top three types of cash flows for investment analysis. The types are: 1. Initial Investment 2. Operating Cash Flows 3. Terminal Cash Flows. Cash Flow: Type # 1. Initial Investment: The initial investment is an outlay of cash that takes place in the initial period, t=0, when an asset is purchased. It comprises, primarily, [...]