Caledonia

Caledonia should focus on unloosen hard currency menstruate quite than accounting makes because the free cash flow is what the plaque receives, which can then be reinvested. Through thoroughly analyzing the free cash flow, Caledonia would be able to determine the actual cohere ahead or the cost involved. The organization should primarily focus on the incremental cash flow because the incremental cash flow holds a marginal benefit from the project. Depreciation is considered to be an get down item which means that the greater the depreciation, the larger the expense pull up stakes be to the organization. Therefore, if Caledonia was looking at the project from an accounting profit view, the profit would be much lower than that of the free cash flow.

2. In business finance there are a number of different cash flows. Caledonia will use the avocation incremental cash flows for this project in years 1 through 5:

3.



The initial outlay is comprised of cash expenditures, changes in net working capital, net cash flow from the barter of existing or old and non-useful equipment, and investment tax credits

2 & 3
|Year |0 |1 |2 |3 |4 |5 |
|Units Sold | |70,000 |120,000 |140,000 |80,000 |60,000 |
|Sale Price | |$ccc |$300 |$300 |$300 |$260 |
| | | | | | | |
|Sales Revenue | |$21,000,000 |$36,000,000 |$42,000,000...If you want to get a full essay, order it on our website: Ordercustompaper.com



If you want to get a full essay, wisit our page: write my paper