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    Explain why cash flow is important

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    In an organization, such as Wal-Mart, identify at least four significant decisions that must consider cash flow. For each decision, explain why cash flow is important.

    My goal is to elaborate on the information that you provide. If you can give me two to three paragraphs on each decision - I should be able to expand that to one page each.

    If you use a reference - please provide it for me so that I can continue on the same chain of thought - but references are not required.

    Thank you for your assistance!

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    Solution Preview

    Cash flow is extensively used in capital budgeting decisions, ie, whether or not to invest in new plant or machinery or engage in capital projects. Methods such as discounted cash flow analysis use cash flow expected to be generated by the new capital project to arrive at investment decisions.

    Cash flows are also important for short term and long term financing decisions. For example, the decision to take a interest ...

    Solution Summary

    This solution explains why cash flow is important.