Why Do We Need to Use Cash Flows in Economic Analysis?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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Why Do We Need to Use Cash Flows in Economic Analysis?

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Cash flow is the movement (inflow and out flow) of cash or amount of cash that received or spend during a period of time. Cash flow is important for economic analysis of project, because it helps to take decision regarding the project (accept or reject the project). There are different methods like net present value, internal rate of return and pay back period that use cash flow for decision making.

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