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You
determine the annual cash flow for a project by
summing all incoming and outgoing cash flows.
Incoming flows might be revenue or savings, and
outgoing flows are typically material costs and
taxes. Summing both flows gives you net cash flow
for each year, illustrated in Figure 1 below.
It is important that you include only those cash
flows that change because of the project. If no
additional maintenance is anticipated, for example,
do not include it.
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