Cash flow profile

Estimate the cash-flow profile for each alternative. The cash-flow profile should include the costs and revenues if they differ, for the alternative being considered during each period in the planning horizon. For public projects, revenues may be replaced by estimates of benefits for the public as a whole. If revenues can be assumed to be constant for all alternatives, only costs in each period are estimated. Cash-flow profiles should be specific to each alternative. We shall denote revenues for an alternative x in period t as B (t,x), and costs as C (t,x). By convention, cash flows are usually assumed to occur at the end of the time period, and initial expenditures to occur at the beginning of the planning horizon, that IS, m year 0. 

Perform sensitivity and uncertainty analysis. Calculation of life-cycle costs and net benefits assumes that cash-flow profiles and the value of MARR are reasonably accurate. In most cases, uncertain assumptions and estimates are made in developing cash flow profile forecasts. Sensitivity analysis can be performed by testing how the outcome changes as the assumptions and input values change. 

Figure 4-1-Cash-Flow Profile of 100 Drug Candidates...

Figure 4-7—Cash-Flow Profiles Used in Internal Rate of Return Computations...

KEY N = Life of investment project Q = Cash flow profile KEY N - Life of Investment Project Q - Cash-flow profile. 

KEY IRR - internal rate of return Q - cash flow profile. 

Traditional Engineering Economy Cash Flow Profiles... 

The cash flow profile should include aU cash items anticipated to flow into or out of a project. Each cash flow item must be identified specifically according to the time at which this flow occurs. The major items included in an engineering economy study are ... 

A more complex exeunple would consider the investment yielding the four-year stream of cash flows illustrated in the discussion on cash flow profiles. What rate of return would equate the — 6000... 

Asset swaps are used to alter the cash flow profile of a bond. The asset swap market is an important segment of the credit derivatives market since it explicitly sets out the price of credit as a spread over LIBOR. Pricing a bond by reference to LIBOR is commonly used and the spread over LIBOR is a measure of credit risk in the cash flow of the underlying... 

Cash flow profile. CMOs profiles are based on an assumed prepayment rate, known as the pricing speed, which reflects current market expectations for prepayment levels and market interest rates. 

The cash flow profile of a CDO depends on the following issues ... 

The aim of this feasibility study is to forecast the profitability of the new product for the company. The feasibility is best explained by means of the so-called cash flow profile, according to Figure 2.2. 

Figure 2.2 Fictitious Cash Flow Profile of a project.

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