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FinanceQ&A Library"yoar ananyPIP,Sneaker 2013 Questions1. Should the following be included in Sneaker 2013's capital budgeting cash flow projection? Why or why not?Building a factory and purchase/installation of equipmentа.Research & development costsb.Cannibalization of other sneaker salesс.d.Interest costsChanges in current assets and current liabilitiesе.fТаxesCost of goods soldAdvertising and promotion expensesh.i.Depreciation chargesQuestion

Asked Oct 12, 2019

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I attached an image of things that "could go onto a cash flow statement" would you advise using any or all of these ?

Step 1

The building of a factory or purchase of equipment will be counted while calculating capital budgeting cash flow projection because they will lead to an outflow of cash from the business. The cash outflows are reduced from the cash inflows to calculate the net cash flows of the business.

Step 2

Research and development cost is the part of cash outflows which the company made on the development of the new technologies of the product to increase the sale. The research and development cost will be reduced from the cash inflows to calculate net cash flows.

Step 3

Cannibalization means a reduction in the sales volume of the product when the same seller introduces the new product. The cannibalization of other sneaker sal...

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