Study Of Cash Flow In Finance Appraisal Of Reconstruction And Expansion Projects

Along with the development of our country's market economy and the progress in science and technology,many projects especially industry projects are not adopted to the development of market economy because of the old equipment and technique, a considerable number of enterprises need renovate or extend.Faced with this project decision making,in order to provide decision makers with reliable bases,the reconstruction and expansion projects must be correctly evaluated.Reconstruction and expansion projects are the same with new projects, in order to avoid errors in decision making process,we need conduct a comprehensive and systematic financial evaluation.To get accurate financial, we need calculate a series of financial indicators, such as return on investment(ROI), net present value (NPV), net present value rate (NPVP), profitability index (PI) and internal rate of return (IRR),etc,cash flow is used as a basis for calculating these indicators. However,identification of cash flows is a complicated task, there are still some issues that need to be researched but are not handled, such as the accuracy and reliability of identifying cash flow in finance appraisal of reconstruction and expansion projects.Around the central theme of identifying cash flow in finance appraisal of reconstruction and expansion projects, in accordance with the ideas of asking questions, solving problems and analyzing questions,this paper focus essentially on the following aspects.First,this article has analyzed the. domestic and international related theories, combined with the need of this paper, reconstruction and expansion projects,cash flow,fmancial evaluation are respectively defined. The finance appraisal of reconstruction and expansion projects and the cash flow are full analyzed in this thesis combined with the characteristics of reconstruction and expansion projects.Then,base on the general principle and basic method of new construction project, combined with the characteristics of reconstruction and expansion projects,expounds how to deal with some actual situationgs in indentifying cash flow in the process of finance appriaisal of reconstruction and expansion projects such as the submersion cost,the opportunity cost,the connection effect, the apportionment of expense and discards property and so on.Finally, by scientifically analyzing and computing, it gets objective evaluvation conclusion, aim is to make theoretical results applied to finance appraisal of reconstruction and expansion projects.