Shouldice Hospital

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Introduction Capital budgeting is very important in decision making for the financial manager of any firm. Most new projects take time in developing because of the research analysis required in opening a new addition to the company. The cash flow is a huge factor in making the decision of a project. For instance, capital expenditures require firms to outlay large sums of funds to initialize the project. Second, firms will need to formulate ways of generating and repaying these funds once they are initiate. Third, there must be a good since of timing and critical finance decision to make it all happen. The importance of Capital Budgeting, Cash Flows & New Project Capital budgeting requires that any new projects become infused…show more content…
On the other hand, there are several components that must be identified when looking at incremental cash flows which include: The initial outlay, cash flows from taking on the project, terminal cost or value and the scale and timing of the project. This means that a positive incremental cash flow is a good indication that an organization should spend time and money investing in the project. Operating Cash Flow (OCF) is a measure of the amount of cash that a company generates at their normal business operation. However, operating cash flow is important because it is an indicator of whether a company is able to generate sufficive amount of cash flow to maintain and grow its operations or whether it may require external financing to launch the project. Conclusion New business project can require time in bring on the establishment. However, the finance manager should analyze and research their project so to know the cost and cash flows that would be necessary to accept this project. Also, there should be formulated plans to repay or finance the project. Managers must be aware of the pros and cons of the new project. On the other hand, there should be time spent on the development of the project and investment should be in place for the establishment of the project. On the other hand, if the company is unable to meet the requirement of the project, then the project could possibly be

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