1. The identification of relevant project cash flows. We discussed project cash flows and described how to handle some issues that often come up, including sunk costs, opportunity costs, financing costs, net working capital, and erosion.
2. Preparing and using pro forma, or projected, financial statements. We showed how information from such financial statements is useful in coming up with projected cash flows, and we also looked at some alternative definitions of operating cash flow.
3. The role of net working capital and depreciation in determining project cash flows. We saw that including the change in net working capital was important in cash flow analysis because it adjusted for the discrepancy between accounting revenues and costs and cash revenues and costs. We also went over the calculation of depreciation expense under current tax law.
4. Some special cases encountered in using discounted cash flow analysis. Here we looked at three special issues: evaluating cost-cutting investments, how to go about setting a bid price, and the unequal lives problem.

The discounted cash flow analysis we've covered here is a standard tool in the business world. It is a very powerful tool, so care should be taken in its use. The most important thing is to get the cash flows identified in a way that makes economic sense. This chapter gives you a good start in learning to do this.