What to include in initial investment in cash flow?
soeren_alexander_petersen asked:
In a typical cash flow statement for year 0, do you include the total investment or just the equity investment that one injected into the project?
In a typical cash flow statement for year 0, do you include the total investment or just the equity investment that one injected into the project?
Also, when calculating the NPV/IRR, does one use the total investment or just the equity part?
E.g. if the equity part (such as through stocks or out-of-pocket cash) is 25% and debt financing is 75% – do you include the whole 100% in year 0 and as part of the NPV calculation or only the 25%?
Matthew Rawl
The web httpwwworbitbusinessloanscom httpwwworbitmerchantsolutionscom.