Cashflow Restructure And Evaluation Method Research For Feasibility Study Of Investment Project

Under the circumstances that China joined into WTO and the whole nation carry out sustainable development strategy, the corporation operation and extension increasingly depend on the strategic management itself, this paper points out the importance of market feasibility study and law feasibility study; emphases on sustainable development, getting a deeper evaluation to environment effect, advocating the clean GDP; oriented-strategy of corporation are destined to the tides of investment project feasibility study.Based on the correct analysis of the cashflow for investment project feasibility study's financial evaluation, and the thought on investment project financial evaluation's cashflow statement being an income statement according to cash basis, the author found some untrue which exist in The Guideline Of Investment Project Feasibility Study and The Report Example For Investment Project Feasibility Study, and created a restructure method to counter their financial cashflow statement, financial cashflow statement on equity capital, and statement of financial cashflow on a specific investors' investment. Restructure method's main principle and context are: the selling tax of VAT should not be included in the sales revenue, VAT should not be listed as a decrease to calculate earnings; working capital, VAT, and loan principal should not be listed as cash outflow.Restructure statements include: pre-tax of income financial cashflow statement on financing from equity capital only, financial cashflow statement on multi-financing, and shareholder financial cashflow statement on multi-financing.The final decision of investment project feasibility on finance must depend on the profitability analysis according to the financial cashflow statement on multi-financing, due to multi-financing being the practice financial and taxation environment of project's operation.The pre-tax of income financial cashflow statement on financing from only equity capital is used to study the profitability of a project before financing approach (without interest) and income taxing; financial cashflow statement on multi-financing is used to review the profitability of a project at the circumstance that both financing from equity capital and liability capital; multi-financing shareholder financial cashflow statement is used to work over the profitability of a project belong to the shareholder.It is not necessary to consider the net scrap value when you calculate depreciation of fixed assets on investment project financial evaluation; analyzing the profitability of aproject, payback period calculating with time value of money should instead of the traditional payback period.On practice case research, 11 projects from The Report Example For Investment Project Feasibility Study were evaluated on finance by restructure method about cashflow factor and evaluation according to this paper, the result of 5 projects being refused almost obtaining 50% of total projects. This is a great difference from the result of 2 projects being refused only according to the Report Example's conclusion.