Cash Flow Estimation and Risk Analysis (Finance Management) (PowerPoint PPT Slide Deck)

BENEFITS OF DOCUMENT

1. Provides of Framework Cash Flows due to Investments in Net Operating Working Capital (NOWC)
2. Provides of Three types of risk are relevant in capital budgeting
3. Provides of How is each type of risk measured, and how do they relate to one another?

DESCRIPTION

This product (Cash Flow Estimation and Risk Analysis [Finance Management]) is a 60-slide PPT PowerPoint presentation slide deck (PPT), which you can download immediately upon purchase.

Cash Flow Estimation and Risk Analysis
Finance Management

Lecture Outline
1. Incremental Cash Flow for a Project
2. What is the depreciation basis?
3. Why is it important to include inflation when estimating cash flows?
4. Cash Flows due to Investments in Net Operating Working Capital (NOWC)
5. What if you terminate a project before the asset is fully depreciated?
6. What is the project's MIRR?
7. What is the project's payback?
8. What does "risk" mean in capital budgeting?
9. Is risk analysis based on historical data or subjective judgment?
10. What three types of risk are relevant in capital budgeting?
11. How is each type of risk measured, and how do they relate to one another?
12. What is sensitivity analysis?
13. What is scenario analysis?
14. What is a simulation analysis?

The most important, but also the most difficult, step in capital budgeting is estimating project cash flows. Many variables are involved, and many individuals
and departments participate in the process.
Estimating cash flows:
1. Relevant cash flows
2. Working capital treatment
3. Inflation

Three types of risk are relevant in capital budgeting
1. Stand-alone risk
2. Corporate risk
3. Market (or beta) risk

Risk Analysis:
1. Sensitivity Analysis,
2. Scenario Analysis
3. Simulation Analysis

Source: Best Practices in Business Case Development, Capital Budgeting, Business Case, Cash Flow Management PowerPoint Slides: Cash Flow Estimation and Risk Analysis (Finance Management) PowerPoint (PPT) Presentation Slide Deck, UJ Consulting