What Is Cash Inflow?

Cash inflow refers to the increase in cash income or savings in cash expenditures on investment projects.

Cash inflow

(1) Cash sales income. That is, the total sales income realized each year.

(2)

Estimate of operating income

Estimates should be made according to the projected unit price and projected sales volume of the relevant products of the project during the operating period. In the case of cash discounts and sales discounts calculated by the total price method, operating income refers to the net amount excluding discounts and discounts.

Estimate of residual value of recovered fixed assets

It is assumed that the depreciation period of the fixed assets is equal to the production and operation period. Therefore, for construction projects, as long as the original value of the fixed assets is multiplied by its statutory net residual value rate, the residual value of the fixed assets recovered at the termination point can be estimated;

The balance of fixed assets recovered in advance during the production and operation period can be estimated based on its estimated net residual value. For renovation projects, you need to estimate twice,

The first estimation: the recovery balance that occurs at the beginning of the construction period, that is, the net realizable value of the old equipment sold in advance.

Second estimate: Estimate the recovery balance that occurred at the termination point according to the method of the construction project.

Estimation of recovered bottom liquidity

Assuming that there is no early recovery of working capital during the operating period, the working capital recovered once at the termination point should be equal to the total amount of the bottom-up working capital investment advanced in each year.