Cash flow Pattern
Cash flow pattern associated with capital investment projects can be classified as conventional or non-conventional.
Conventional Cash Flows They consist of an initial cash outlay followed by a series of cash inflows. Most of the capital expenditure decisions display this pattern of cash flow. To illustrate, the rum may spend Rs 1,500 in time period zero and as a result may expect to receive a Rs 300 cash inflow at the end of each year for the next 8 years. The conventional cash flow pattern is diagrammed in Fig. 10.1.