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Describe what happens without the proposal
A fictional firm can continue its current process or install new equipment. Write the baseline activity and expected cash flows before describing the equipment’s benefits. A benefit that would occur under both alternatives is not an incremental gain from installation.
Build a dated bridge
| Layer | Question |
|---|---|
| Initial outlays | What additional amounts occur now? |
| Operations | Which receipts and cash costs differ by period? |
| Other business effects | Which existing activities change? |
| Working capital | When are balances funded and released? |
| Terminal amounts | Which closing amounts are actually modeled? |
Keep the cash-flow and rate perspectives consistent
This cluster uses stated project cash flows and explicit per-period rates. If a model discounts operating flows using a financing-adjusted rate, adding the same financing cost again as a project outflow can double count it. State the selected perspective rather than mixing boundaries.
Keep uncertain inputs visible
After-tax status, recovery of balances and terminal proceeds are assumptions to document. A positive result is conditional on the forecast and rate; it does not verify the commercial proposal. The model worksheet and worked bridge below show the arithmetic separately from those judgments.