Daily Dose 011 | Engineering Economics
How do you find the Cash Flow of Investment?
Look, I get it, there is a reason we became engineers and not CPAs…we design – they crunch numbers.
But the reality is, to provide the most value to the communities we represent, we must know enough to get dirty in the world of economics.
In this video, we jump in to a problem that is covered within the subject of ENGINEERING ECONOMICS, specifically, diving in to determining the CASH FLOW of an engineering investment from the business owner’s perspective visually using a CASH FLOW DIAGRAM.
Key Definition
What is CASH FLOW DIAGRAM?
CASH FLOW DIAGRAMS help us visually represent CASH FLOW (income and expenses) over a desired time interval.
The diagram is simple, consisting of a horizontal line with markers at a series of time intervals.
At the point of a CASH FLOW the EXPENSE or COST are shown.
It is customary to take cash flows during a year at the end of the year, or EOY (end-of-year).
CASH FLOW DIAGRAMS can also be represented differently for the same situation depending on the view in which it is being developed.
Check out the video and see how we can go about solving this type of problem in the most efficient manner.
As always, with Love, Prepineer
Video Review
How to determine Cash Flow
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