Chapter 6
Project Revenue and Cash Flows
Chapter 5 discussed calculating an enterprise-wide hurdle rate, weighted average cost of capital (WACC). This chapter looks at the investing and financing decisions on a company's individual projects. We provide insight on the role of the financial manager and introduce how to calculate a company's statement of cash flows. The statement of cash flows analysis will act as a segue into calculating free cash flows of a proposed project. Then we focus on different methodologies for calculating a project's viability.