Tài liệu FINANCIAL CASH FLOW FOR PROJECT docx

Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures - Constructing Financial Cash Flow for Project Cao Hao Thi 1 CAO HAØO THI CONSTRUCTING FINANCIAL CASH FLOW FOR PROJECT PROJECT CASH FLOW PROFILE Initial investment phase Operational phase Cash receipt minus cash expenditure 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures - Constructing Financial Cash Flow for Project Cao Hao Thi 2 PRINCIPLES FOR CONSTRUCTING CASH FLOW z Including only CASH RECEIPT and CASH EXPENDITURE z OPPORTUNITY COST z SUNK COST RULES OF CONSTRUCTING CASH FLOW z END OF YEAR: Cash receipts and cash expenditures within one year are recorded at the end of that year z Year 0 z Disposal time (liquidation time) Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures - Constructing Financial Cash Flow for Project Cao Hao Thi 3 CONSTRUCTING CASH FLOW PROFILE FOR INVESTMENT PLAN z Coordinating the plans of technical construction, finance, economic analysis, and available resources CONSTRUCTING CASH FLOW PROFILE FOR OPERATION PLAN z Coordinating market and resources analyses, determining the receipts and expenditures for project operation Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures - Constructing Financial Cash Flow for Project Cao Hao Thi 4 BASIC VARIABLES IN CASH FLOW SATATEMENT DEPRECIATION z Why is there the concept of depreciation cost? z Is depreciation cost an item in cash flow statement? BASIC VARIABLES IN CASH FLOW STATEMENT DEPRECIATION z Using depreciation cost to determine the cash flow pattern: – Calculating tax expenditure – Calculating disposal value Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures - Constructing Financial Cash Flow for Project Cao Hao Thi 5 BASIC VARIALBES IN CASH FLOW STATEMENT CASH RECEIPT and SALES z Sales, Account receivable (AR) and Cash Receipt z Cash Receipt in period = Sales in period + (ARbeginning –ARend) BASIC VARIALBES IN CASH FLOW STATEMENT CASH EXPENDITURE and PURCHASES z Purchases, Account Payable (AP)and Cash Expenditure z Cash Expenditure in period = Purchases in period +(APbeginning – AP end) Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures - Constructing Financial Cash Flow for Project Cao Hao Thi 6 BASIC VARIALBES IN CASH FLOW STATEMENT CASH z Cash balance (CB) Cash needed to do transactions in project operation z Increase in CB is an outflow z Decrease in CB is an inflow BASIC VARIALBES IN CASH FLOW STATEMENT LAND COST z Investment in land Vs. investment in project z Dealing with land as a separate investment. Don’t include profit/loss of investment in land as receipt/expenditure in project as long as there is no direct improvement/destruction for the land created by the project z Land cost is the opportunity cost, the annual lending cost or capital cost of the project in the time of using land. Fulbright Economics Teaching Program, 2004-2005 The Appraisal of Development Expenditures - Constructing Financial Cash Flow for Project Cao Hao Thi 7 PROJECT APPRAISAL POINTS OF VIEW z Financial appraisal – Equity point of view – Total Investment point of view (TIP) z ECONOMIC POINT OF VIEW z OTHER POINTS OF VIEW PROJECT APPRAISAL POINTS OF VIEW TIP EQUITY ECONOMIC BUDGET Cash receipt ++ + Cash expenditure - Opportunity cost - Subsidy ++ - Tax + Borrow/Payment + / - - / + Externality + / - . Expenditures - Constructing Financial Cash Flow for Project Cao Hao Thi 1 CAO HAØO THI CONSTRUCTING FINANCIAL CASH FLOW FOR PROJECT PROJECT CASH FLOW PROFILE Initial. - Constructing Financial Cash Flow for Project Cao Hao Thi 6 BASIC VARIALBES IN CASH FLOW STATEMENT CASH z Cash balance (CB) Cash needed to do transactions in project