The Analysis On The Cash Flow Of High Tech Communication Base Station Project

Abstract:Cash flow analysis is one of the emphasis and difficulty of the financial evaluation for project investment decision-making. Based on the condition that there are some defects in flow calculation method for production investment project given by the current textbooks,this paper proposes to revise the methods of caculating project discount rate depreciation of fixed assets and intangible assets by considering time value factor, which makes flow calculation method valider and more reasonable. And alson this paper takes the case of caculating the cash flow of a suproposed new communication base-station production project of RN Communications Co., Ltd for verifying above modified method.The paper consists of six chapers:(1) chapter one introduces the background of the research and the current status of the relevant studies conditon at home and overseas,(2)Chapter two brings up the problems of the traditional cash flow estination method and the correction methods,(3)Chapter three gives the details of traditonal cash flow caculation process for the above case;(4)In chapter four,the cash flow for above case is recaculated by modified method and analyzed comparing with the results in chapter three by traditonal method,(5)In chapter five, the financial feasibility evaluation is made based on cash flow analysis results for above case.(6)Finally, the last chapter of this paper is the conclusion and the forecast.The main work of this paper includes:(1) The new method for caculating project discount rate by using the capital asset pricing model and comprehensive capital cost pricing model is introduced to take the place of the traditional method by using industry average discount rate.(2) The method of caculationg depreciation base is revised by considering time value factor, and at the meantime, depreciation of fixed assets and amortization of intangible assets are recacultion by following the annuity investment recovery coefficient, replacing the traditonal way of straight line method,which can avoid the problem that long-term assets investmen would not be compensated fully under the traditional methods. (3) The relationship of project cash flow and the time to raise finacing is explored and some advices to chose right time for IPOs is given to RN Communications Co., Ltd.In conclusion, the research is in favor to improve the current cash flow analysis model and to make more scientific investment decision for of RN Communications Co., Ltd.