Final answer:
Cash flow analysis is a method for determining the estimated annual costs and benefits for a project.
Step-by-step explanation:
Cash flow analysis is a method for determining the estimated annual costs and benefits for a project. It involves evaluating the inflow and outflow of cash over a specific time period to determine the net cash position. By considering costs and benefits over time, cash flow analysis helps decision-makers assess the financial feasibility and profitability of a project. For example, when a company is considering investing in a new product line, they need to assess the costs associated with production, marketing, and distribution, as well as the expected sales revenue over time. Cash flow analysis allows them to calculate the net cash flow for each period and make informed decisions based on the estimated financial impact of the project. Overall, cash flow analysis is crucial in evaluating the financial viability of projects and making informed business decisions.