Explain the following terms: incremental cash flow, sunk cost, opportunity cost,externality, and cannibalization.

Q: What are the two fundamental approaches to Probabilistic Cash Flow Analysis? What are its benefits?

A: The two fundamental approaches to the probabilistic cash flow analysis is shown as follows: Cash…

Q: Explain why depreciation and interest should not be included as costs in a discounted cash flow…

A: The company makes several investments and an evaluation of investment is necessary. Therefore, the…

Q: Discuss Positive side effects and negative side effects cash flows? Provide examples. Explain the…

A: Solution- What is Cash flow-         Cash flows are internet the net of money and cash-equivalents…

Q: Describe about the cash flow risk.

A: Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a…

Q: What is free cash flow (FCF)?

A: Free cash flow (FCF): It speaks to money a firm creates after accounting for cash outflows to back…

Q: What is the cash conversion cycle? What is its equation?

A: The CCC tells firms that in how many days’ firms will realize its cash from its operations. It is a…

Q: Describe the project cash-flow analysis?

A: The question is based on the concept of  cash flow analysis of  a project.

Q: The length of time required for an investment to generate cash flows sufficient to recover its…

A: Net Present Value It is the amount of present value of the cash inflows net of cash outflows. It…

Q: How would a reduction in the cash conversion cycle increase profitability?

A: Cash conversion cycle (CCC): It is a metric that speaks to the time it takes for a business…

Q: Describe the process of developing cash flows for a project?

A: The project cash flow is required for the computation of NPV which further helps in analyzing the…

Q: Drw a Cash flow diagram for comparing cost-only?

A: Initial costs  The occurrence of cost at the time of design and the construction of the project.…

Q: Which of the following terms accurately describe what a resource is worth in its next- best use. a.…

A: In this question the factor which describes the best worth of resources is asked. We will analyse…

Q: Cite the advantages brought about by an effective cash flow forecasting

A: The method of making an estimation or prediction of any company's projected financial situation is…

Q: Given the following, what is free cash flow?

A: The free cash flow is calculated by deducting the capital expenditure from the cash flow from…

Q: How much is the expected cash flow disregarding other simulations?

A: Capital budgeting is a method used for finding the profitability of investment proposals. It…

Q: Why do we need to predict how certain costs will behave in response to change activity in project…

A: Cash flow analysis is the way by which financial health of the company can be checked. In this…

Q: In computing the present value of an investment in equipment, the present value of the residual…

A: Net Present value = Present value of future cash flows + Present value of terminal cash flow -…

Q: The formula to compute free cash flow is

A: The formula to compute free cash flow is here:

Q: Why is the free cash flow valuation model so widely used?

A: With the free cash flow of the firm, administrators will focus on potential businesses that increase…

Q: solve this cash flow

A: Cash flow refers to the balance of the cash inflows and outflows of a business over a period of…

Q: Explain the Incremental Cash Flows from Undertaking a Project?

A: Incremental cash flows  It is an additional amount of net cash flows produced by the project…

Q: Define the term the cumulative cash flow?

A: Cash flows are the cash generated from the operation of the business organisation. In other words,…

Q: What role do incremental cash flows play in a replacement analysis?

A: Answer: Introduction: Replacement analysis is one of the key analyses in the concept of capital…

Q: Which of the following decisions do NOT influence the cash from operating activities slide?  Which…

A: Operating Activities are company core business activities such as manufacturing , distributing ,…

Q: Mathematically, how can we determine the rate of return for a project's cash flow?

A: IRRIt is the capital budgeting technique of discounted cash flow which gives a rate of return being…

Q: What is irregular cash flow stream?

A: Cash Flow has a flow concept. There can either be cash inflow or cash outflow. Generally, for…

Q: Which of the following phrases best describes the term " actual cash value"? a. market value b.…

A: Actual cash value is the actual amount at which the property could be sold and it is usually less…

Q: How can we compute incremental cash flow, and IRR?

A: Incremental cash flows and IRR, both are the terms of Capital Budgeting decisions. Incremental cash…

Q: What factors lead to a better cash flow position? How?

A: Cash flows refer to the amount of net cash and cash equivalents that flow in and out of the…

Q: What should a firm’s goal be regarding the cash conversion cycle,holding other things constant?…

A: The cash conversion cycle refers to the number of days between paying for crude materials or…

Q: How can we determine the Cash flows associated with producing products?

A: The transfer of money in business is called the cash flow of the money in a business. If a business…

Q: Define each of the following terms:b. Incremental cash flow; sunk cost; opportunity cost;…

A: Introduction: This question is related to the concepts of corporate finance. Corporate money…

Q: Calculate the present value and future value of an uneven cash flow stream.

A: A stream of cash flow is uneven  when all the amounts in the series of cash flows are unequal .i.e.,…

Q: What is free cash flow valuation model?

A: Free cash flow (FCF) is the amount of money available to an organization at their complete disposal,…

Q: Explain how sunk costs and cannibalisation affect the determination of an investment’s incremental…

A: Introduction : . Simply put, sunk costs refers to the costs that has already been incurred and the…

Q: we can still calculate the IRR on incremental cash flows. True or false? Explain with example?

A: True, IRR can be still computed on incremental cash flow. IRRIt is the technique of discounted cash…

Q: What should a firm’s goal be regarding the cash conversion cycle?  Explain

A: The cash conversion cycle measures the number of days between the company making a deposit to buy…

Q: looking at the same cash flow stream.

A: NPV is the net difference between present value of cash inflows and present value of cash outflows.

Q: Explain the following terms: incremental cash flow, sunk cost,opportunity cost, externality,…

A: Essentially, incremental cash flow refers to cash flow that a corporation acquires once it takes on…

Q: Why are we more likely to need to calculate the PV of cash flow streams than the FVof streams?

A: The present value of cash flows is the value of future cash flows at the time zero. The present…

Q: What is the project's cash flow?

A: Statement of cash flow: It refers to a financial statement that shows all the cash payments and…