Project Cash Flow Analysis: Tools for Managers

1. Learn to estimate project cash flows accurately for investment appraisal.

2. Understand the difference between accounting profits and cash flows.

3. Gain practical skills in forecasting inflows, outflows, and incremental cash flows.

4. Strengthen your ability to evaluate projects on financial viability, not just technical merit.

5. Build expertise in capital budgeting and strategic resource allocation.

This course focuses on the estimation of project cash flows, a critical step in capital budgeting and investment appraisal. Learners will understand how to identify, measure, and forecast cash inflows and outflows associated with projects. The program emphasizes distinguishing between accounting profits and actual cash flows, incorporating incremental cash flows, and adjusting for taxes, depreciation, and working capital. By mastering cash flow estimation, managers and engineers can evaluate projects more accurately, ensuring that investment decisions are based on realistic financial projections.

• Meaning and importance of project cash flow estimation

• Difference between accounting profits and cash flows

• Components of project cash flows:

  • Initial investment outlay

  • Operating cash inflows

  • Terminal cash flows

• Incremental cash flows and relevant costs

• Treatment of depreciation and taxes in cash flow estimation

• Impact of working capital changes

• Role of cash flow estimation in capital budgeting decisions