1. List, describe, and explain the five Principles of cash flows. Keep in mind that cash flow here is not your usual cash flow statement, but the free cash flow of money your business has leftover to use for other purposes after having expensed cash toward the acquisition of permanent assets and other expenses needed to sustain its ongoing operation such as, paying down the applicable principal and interests on interest-bearing liabilities.
2. Capital budgeting is concerned primarily with the after-tax net operating cash flows (NOCF) of a particular project, or change in cash inflows minus change in cash outflows. For any year during the life of a project, these may be defined as the change in operating earnings after taxes, Change in operating earnings after tax (ΔOEAT), plus the change in depreciation. Discuss this.