As a financial manager and evaluating capital investments, one of the most difficult portions of the analysis is to predict the future cash flows.   Please pick a capital investment of your choice and describe how you would develop the Free Cash Flows.   Pay particular attention to describing if working capital should be included and incremental revenue/income.

“By applying capital to investments with long-term benefits, the company is attempting to produce value.  This value is dependent on expected future cash flows as well as on the cost of funds.”  1. Explain this statement with regards to the role of cost of capital in financial management decisions.

Capital budgeting techniques aid businesses with investment decision-making. Many approaches can be used, with some being more advanced than others. Describe the payback period approach to capital budgeting. Explain 1 advantage and 1 disadvantage of the technique. Explain why it would be wise for a financial manager to learn advanced capital budgeting techniques.

Provide an example of a possible capital investment to use in your argument to management?

In calculating the incremental after-tax cash flows associated with a particular investment, the firm must consider many types of cash flows.  Select all  the incremental cash flow types below that the firm would not incorporate directly into their incremental after-tax cash flow estimates. A) revenues B) operating costs C) sunk costs D) net working captial E) opportunity costs F) financing costs

What challenges do you face with working capital management? How will you ensure your working capital is managed effectively and efficiently? Include the management of your current assets and current liabilities.

What are some of the ways that you would use Capital Investment Decisions and what principles stood out to you?

We learn there are three primary methods used to analyze capital investment proposals.   Please compare and contrast these three methods.   Be sure to include strengths (benefits) and weaknesses (drawbacks) of each.   Three primary methods are: Payback method Internal rate of return Net present value.

1. Define capital expenditures and provide examples of capital expenditures.2. Cash flows for a particular project should be measured on an incremental basis. What does that mean?3. How does the opportunity cost concept affect capital budgeting cash flow determination?4. What factors should be considered when estimating a new business’ NINV? Is it any different for an asset replacement project. 5. Why is depreciation, a noncash expense, considered when estimating a project’s net cash flows?6. What are the potential tax consequences of selling an old asset in an asset replacement investment decision?

The use of natural resources in an economic activity involves setting up a project forharvesting (i.e. extracting) these resources. For the project to be viable, both economic andfinancial indicators - such as net present value (NPV) and internal rate of return (IRR)considering time value of money - are employed. a) Briefly explain the concept of "time value of money".  b) Moreover, explain how you will use NPV and IRR to determine the viability of a project.