Step 1: Introduction
Begin with an introductory paragraph that describes what cash flow generation is and why it is important for every business to focus on cash flow generation first to keep the business afloat.
Step 2: Research and Write Essay Content
Consider the following scenario: You are the financial manager of a firm that is contemplating investing in a new project that you expect will generate cash flows of $10,000 per year for five years and then $15,000 per year for another two years. At the end of seven years you expect to sell the project’s assets for $50,000. You believe that you should earn at least 14% to compensate the shareholders for the project’s risk.
There are specific questions that need to be answered:
Explain the process for evaluating this project.
What is the present value of the project’s terminal value?
What is the most that you should pay for this project?
Is this project consistent with the firm’s goal assuming you can invest $25,000 in this project?
What is the primary goal of the firm?
Describe and explain to the reader what the above cash flow generation items are and answer the questions.
Step 3: Conclusion Summary
For the conclusion paragraph summarize what you have learned about cash flow generation and share your thoughts about business cash flow planning.
The question first appeared on Write My Essay
