Free Cash Flow

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6 Terms

1
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Free cash flow:

How much cash can I return to investors? 

2
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Forecasted income statement:

Used to Estimate free cash flow.

3
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Incremental Cash flow: 

the additional cash flow generated (or lost) by undertaking the project

4
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Sunk Cost?

Ignore sunk cost! Money lost regardless of outcome.

5
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Opportunity cost:

the value of the next best alternative that is foregone when a decision is made

6
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Robustness checks:

the ability of an investment decision about a project to remain reliable under a variety of conditions