Create a cash flow statement with operating activities


Task: You are CFO for your company and you have been given the task of financial planning for a new product to increase corporate earnings per share.

Goal is to maximize shareholder wealth of your product.

Use equity and debt financing to obtain $10,000,000 of budgeted funds for development of the product.

Problem 1) Create a cash flow statement with operating activities, investing activities, and financing activities for five years. The cash flow statement should have at least 5 lines or accounts. You are not working from a time line which would show only net cash flow. Compute the net present value and rate of return for your product. What is your cost of capital.

Problem 2) What leverage calculations are important to show the level of risks you are willing to assume for your company and why?

Will you pay dividends? If yes, when? Why or why not?

Problem 3) What brief presentation could you summarize for a press release?

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Finance Basics: Create a cash flow statement with operating activities
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