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 + / -