Project investment evaluation method based on cash flow control

Abstract

The invention provides a project investment evaluation method based on cash flow control, and the method comprises the steps: determining a cash inflow subitem and a cash outflow subitem of a project according to the income and cost conditions of the project; building a project investment cash flow table and a project plan financial cash flow table; determining a reference discount rate value, and establishing a project internal return rate coefficient measuring and calculating module based on a project investment cash flow table; building a cash flow coefficient measuring and calculating module based on a project plan financial cash flow table; and based on project cash inflow and outflow data conditions, analyzing a relationship between an internal return rate coefficient and a cash flow coefficient, and establishing a project investment risk evaluation system. According to the method, the project investment income robustness is analyzed, the project investment risk is controlled, a more comprehensive project investment financial analysis view angle is provided for investors, the situation that the expected project income cannot be achieved due to cash flow breakage is avoided, and a scientific basis is provided for decision makers.

Description

Technical Field

[0001] The invention relates to the technical field of project investment income and risk assessment, and in particular to a project investment evaluation method based on cash flow control. Background Art

[0002] Complex integrated energy projects usually include two or more energy forms such as wind power, photovoltaics, energy storage, hydrogen energy, and solar thermal energy. The current project financial evaluation methods for integrated energy projects focus more on project revenue indicators. Before financing, the main indicators examined are the project investment financial internal rate of return, financial net present value, and investment payback period. After financing, the indicators examined are the interest coverage ratio, debt repayment coverage ratio, and other indicators. The importance of cash flow to the project operation period is often overlooked. Once the cash flow is broken during the operation period, it will be questionable whether the above indicators can be achieved. Summary of the invention

[0003] In view of the deficiencies of the above-mentioned prior art, the present invention provides a project investment evaluation method based on cash flow control, which analyzes the robustness of project investment returns, controls project investment risks, provides investors with a more comprehensive project investment financial analysis perspective, avoids the situation where expected project returns cannot be achieved due to cash flow interruptions, and provides a scientific basis for decision makers.

[0004] The technical solution provided by the present invention is a project investment evaluation method based on cash flow control, comprising the following steps:

[0005] (1) Based on historical project data and market conditions, forecast project construction investment, revenue, cost, and expenditure during the operation period, determine project measurement parameters, and obtain the project's annual cash inflows and outflows;

[0006] (2) Based on the cash inflows and cash outflows, construct a project investment cash flow statement and a project financial plan cash flow statement;

[0007] (3) Determine the project base discount rate, obtain the project investment financial internal rate of return based on the project investment cash flow statement, establish a project internal rate of return coefficient calculation method, and build a project internal rate of return coefficient calculation module;

[0008] (4) Based on the cash flow statement of the project financial plan, establish a project cash flow coefficient calculation method and build a project cash flow coefficient calculation module;

[0009] (5) Based on the project internal rate of return coefficient module and cash flow coefficient calculation module, a project investment risk assessment system is established to conduct a comprehensive evaluation and analysis of the project investment, including project investment profitability analysis and project risk level analysis.

[0010] Furthermore, the basic evaluation criteria for the project investment profitability analysis in step (5) are:

[0011] A. If the financial internal rate of return of the project investment is greater than the project benchmark rate of return, that is, FIRR ≥ IRR0;

[0012] B. The financial net present value of the project investment is greater than zero, that is

[0013] C. The project investment payback period meets the needs of the investment subject, that is, the relationship between the project investment payback period and the benchmark investment payback period: P t ≤P t0 ;

[0014] Where i c is the discount rate, IRR0 is the project benchmark rate of return, FIRR is the project investment financial internal rate of return, P t is the project investment payback period, P t0 is the benchmark investment payback period, CI is the cash inflow, CO is the cash outflow, t represents the operating period in years, and n is the calculation period.

[0015] Furthermore, the premise of the project investment financial analysis in step (5) should first meet the evaluation criteria of the basic project investment profitability analysis; if so, a project investment risk assessment analysis is performed; if the basic evaluation criteria are not met, the project investment is directly judged to be high risk.

[0016] The basic evaluation criteria for the project investment risk level are as follows:

[0017] (1) If the project investment financial internal rate of return is greater than the project benchmark rate of return;

[0018] (2) During the project operation period, the accumulated surplus funds shall be positive each year.

[0019] The calculation formula of project investment internal rate of return is:

[0020] Where FIRR is the financial internal rate of return, CI is the cash inflow, CO is the cash outflow, t represents the operating period, and n is the calculation period.

[0021] Furthermore, in step (3), the financial internal rate of return of the project investment is the discount rate when the total present value of capital inflows is equal to the total present value of capital outflows and the net present value is equal to zero. The financial internal rate of return coefficient of the project investment is determined by its deviation from the basic rate of return of the project.

[0022] Project investment financial internal rate of return coefficient C1 = (FIRR-ΙRR0) / IRR0

[0023] In the formula, C1 is the internal rate of return coefficient, FIRR is the financial internal rate of return of the project investment, and IRR0 is the project benchmark rate of return.

[0024] Furthermore, the calculation formula for the project's annual net cash flow in step (2) is: NCF t =NCF at +NCF bt +NCF ct

[0025] Where NCF is the net cash flow in year t, at NCF is the net cash flow from operating activities. bt NCF is the net cash flow from investing activities. ct is the net cash flow from financing activities;

[0026] Project operating net cash flow calculation formula: NCF at = Sales revenue + VAT output tax + subsidy income + other income - operating costs - VAT input tax - sales tax surcharge - VAT - income tax - other outflows

[0027] Calculation formula for net cash flow from investing activities: NCF bt = Investment recovery income + dividend income + bond interest income + asset disposal income + other income - construction investment - maintenance investment - working capital - other outflows

[0028] Calculation formula for net cash flow from financing activities: NCF ct =Project capital + construction investment loan + working capital loan + bonds + short-term loans + other inflows - various interest expenses - repayment of debt principal - payable profit - other outflows.

[0029] Furthermore, in step (4), the net cash flows of previous years are discounted based on the basic discount rate, the standard deviation of the net cash flows during the operation period is calculated, and the standard deviation of the net cash flows and the average annual net cash flows during the operation period are calculated to determine the net cash flow deviation;

[0030] Average annual net cash flow

[0031] Standard deviation of annual net cash flow

[0032] Annual net cash flow deviation e1=σ1 / NCF0

[0033] Average annual net cash flow from operating activities

[0034]

[0035] Standard deviation of net cash flow from operating activities

[0036] Deviation of annual net cash flow from operating activities e2=σ2 / NCF a0

[0037] Where N is the project operation period.

[0038] Furthermore, in the step (4), the annual net cash flow deviation, the annual operating net cash flow deviation and the investment financial internal rate of return deviation are compared to obtain the annual net cash flow coefficient and the annual operating net cash flow coefficient.

[0039] Annual net cash flow coefficient C2 = e1 / C1

[0040] Annual net cash flow coefficient from operating activities C3 = e2 / C1.

[0041] Furthermore, in step (5), the net cash flow represents the viability of the project, and the net cash flow from operating activities represents the profitability of the project. The weight ratio of the evaluation indicators is allocated according to the different needs of the investment subject. The sum of the annual net cash flow coefficient weight W1 and the annual net cash flow coefficient from operating activities W2 is 1. The evaluation function of the project risk level analysis is as follows:

[0042] Annual net cash flow risk score S1=C2*W1

[0043] Annual net cash flow risk score from operating activities S2=C3*W2

[0044] Project investment risk score S0 = S1 + S2

[0045] If the S0 score is larger, it means that although the project meets the investment financial indicator requirements, the investment risk is greater; if the S0 score is smaller, it means that the project meets the investment financial indicator requirements and the investment risk is smaller.

[0046] Compared with the prior art, the present invention has the following beneficial effects:

[0047] Different from traditional financial evaluation indicators (project investment internal rate of return, financial net present value and project investment payback period, etc.) to judge the investment feasibility of a project, the present invention establishes a health status evaluation method based on project cash flow control, analyzes the robustness of project investment returns, controls project investment risks, and provides investors with a more comprehensive project investment financial analysis perspective, avoiding the situation where the expected project returns cannot be realized due to cash flow interruption, and provides a scientific basis for decision makers. BRIEF DESCRIPTION OF THE DRAWINGS

[0048] Figure 1 It is a flow chart of the method of the present invention. DETAILED DESCRIPTION

[0049] The following will be combined with the accompanying drawings in the embodiments of the present invention to clearly and completely describe the technical solutions in the embodiments of the present invention. Obviously, the described embodiments are only part of the embodiments of the present invention, not all of the embodiments. Based on the embodiments of the present invention, all other embodiments obtained by ordinary technicians in this field belong to the scope of protection of the present invention.

[0050] like Figure 1 As shown, the present invention is a project investment evaluation method based on cash flow control, comprising the following steps:

[0051] 1. Based on the actual situation of the project, build a project investment cash flow statement and analyze the basic financial indicators of the project investment.

[0052] In the project investment cash flow statement:

[0053] Cash inflow = sales revenue + subsidy income + fixed asset value-added tax deduction + recovery of fixed asset residual value + recovery of working capital

[0054] Cash outflow = construction investment + working capital + operating costs + sales tax surcharge + maintenance investment

[0055] The calculation formula of project investment internal rate of return is:

[0056] The formula for calculating the net present value of project investment is:

[0057] Project investment payback period formula: Pt = the number of years when the cumulative net cash flow begins to become positive - 1 + the absolute value of the cumulative net cash flow in the previous year / the net cash flow in the year when the positive value appears

[0058] Where FIRR is the financial internal rate of return, CI is the cash inflow, CO is the cash outflow, t is the operating period, i is the operating period, c is the discount rate, Pt is the project investment payback period, and n is the calculation period.

[0059] The basic indicators of project investment profitability mentioned above should be able to meet the basic requirements of the company's project investment:

[0060] (1) The financial internal rate of return of the project investment meets the benchmark rate of return requirements of the investment company;

[0061] (2) The financial net present value should be positive;

[0062] (3) The investment payback period meets the benchmark payback period requirements of the investment company;

[0063] The specific manifestations are as follows:

[0064] (1) Relationship between project investment financial internal rate of return and benchmark rate of return: FIRR ≥ IRR0;

[0065] (2) Calculation formula for the net present value of project investment:

[0066] (3) Relationship between project investment payback period and benchmark investment payback period: P t ≤P t0

[0067] Where IRR0 is the project benchmark return;

[0068] Taking an energy company's investment analysis of two off-grid wind and solar hydrogen production projects as an example, the basic conditions of the two projects (hereinafter referred to as Project 1 and Project 2) are as follows:

[0069] (1) Calculation period: 26 years, including 1 year for construction period and 25 years for project operation period;

[0070] (2) Installed capacity: 100 MWp for photovoltaic projects and 100 MW for wind power projects;

[0071] (3) Operating costs: The annual operating costs of photovoltaic projects in the first five years are 40 yuan / kWp, and the annual operating costs of wind power projects are 40 yuan / kWp, increasing by 10 yuan / kWp every five years;

[0072] (4) Investment that can sustain operation: Plan 1: RMB 12 million is invested in minor repairs in the 10th and 20th years of the operation period; RMB 18,000 is invested in equipment overhaul and energy storage battery replacement in the 16th year; Plan 2: RMB 12 million is invested in minor repairs in the 10th and 20th years of the operation period; RMB 30 million is invested in equipment maintenance and replacement of energy storage batteries in batches in the 7th, 9th, 11th, 13th, 15th and 17th years.

[0073] The project investment payback period varies according to different project types and cash flow conditions. The energy investment company generally requires that the investment payback period (before income tax) of the wind and solar hydrogen production project be P t ≤14 years (different companies have different requirements);

[0074] The energy investment company generally requires the project investment financial internal rate of return (before income tax) FIRR ≥ 6% (different companies have different requirements);

[0075] 2. Based on the actual situation of the project, build a cash flow statement for the project investment financial plan. The premise of project investment risk analysis should first meet the basic evaluation criteria; if the basic evaluation criteria are not met, the project investment is directly judged to be high risk. If it is met, the cash flow situation during the project operation period is examined to conduct project investment risk evaluation and analysis.

[0076] In the financial plan cash flow statement:

[0077] Project annual net cash flow calculation formula: NCFt =NCF at +NCF bt +NCF ct

[0078] Where NCF is the net cash flow in year t, at NCF is the net cash flow from operating activities. bt NCF is the net cash flow from investing activities. ct Net cash flows from financing activities

[0079] Project operating net cash flow calculation formula: NCF at = Sales revenue + VAT output tax + subsidy income + other income - operating costs - VAT input tax - sales tax surcharge - VAT - income tax - other outflows

[0080] The calculation formula for net cash flow from investing activities is: investment recovery income + dividend income + bond interest income + asset disposal income + other income - construction investment - maintenance investment - working capital - other outflows

[0081] The calculation formula of net cash flow from financing activities is: project capital + construction investment loan + working capital loan + bonds + short-term loan + other inflows - various interest expenses - repayment of debt principal - payable profit - other outflows

[0082] 3. Examine the profitability of project investment and the degree of growth relative to basic indicators. The financial internal rate of return of project investment is the discount rate when the total present value of capital inflows is equal to the total present value of capital outflows and the net present value is equal to zero. The internal rate of return coefficient of project investment is determined by its deviation from the basic rate of return of the project.

[0083] Project investment financial internal rate of return coefficient C1 = (FIRR-ΙRR0) / IRR0

[0084] In the formula, C1 is the internal rate of return coefficient, FIRR is the financial internal rate of return of the project investment, and IRR0 is the project benchmark rate of return.

[0085] 4. Examine the degree of project investment risk, discount the net cash flow of previous years based on the basic discount rate, calculate the standard deviation of the net cash flow during the operation period, calculate the standard deviation of the net cash flow and the average annual net cash flow during the operation period to determine the deviation of the net cash flow.

[0086] Average annual net cash flow

[0087] Standard deviation of annual net cash flow

[0088] Annual net cash flow deviation e1=σ1 / NCF0

[0089] Average annual net cash flow from operating activities

[0090]

[0091] Standard deviation of net cash flow from operating activities

[0092] Deviation of annual net cash flow from operating activities e2=σ2 / NCF a0

[0093] Where N is the project operation period.

[0094] 5. Build a project investment evaluation method based on cash flow control. Compare the annual net cash flow deviation, annual operating net cash flow deviation and investment financial internal rate of return deviation to obtain the annual net cash flow coefficient and annual operating net cash flow coefficient.

[0095] Annual net cash flow coefficient C2 = e1 / C1

[0096] Annual net cash flow coefficient from operating activities C3 = e2 / C1

[0097] Furthermore, net cash flow represents the viability of the project, and net cash flow from operating activities represents the profitability of the project.

[0098] According to the different needs of the investment subject, the weight proportion of the evaluation index is allocated. The sum of the annual net cash flow coefficient weight W1 and the annual net cash flow coefficient from operating activities W2 is 1, and the evaluation function is as follows:

[0099] Annual net cash flow risk score S1=C3*W1*

[0100] Annual net cash flow risk score from operating activities S2 = C3*W2*100

[0101] Project investment risk score S0 = S1 + S2

[0102] (1) The main financial evaluation parameters of Project 1 are as follows:

[0103] Serial number project unit Numeric 1 Total project investment Ten thousand yuan 114207.01 2 Construction Investment Ten thousand yuan 112000 3 Construction period interest Ten thousand yuan 1607.01 4 Liquidity Ten thousand yuan 600 5 Total sales revenue (excluding VAT) Ten thousand yuan 313274.34 6 Total cost Ten thousand yuan 218610.48 7 Total sales tax surcharge Ten thousand yuan 3117.88 8 Total Profit Ten thousand yuan 91545.98 9 Project investment payback period (before income tax) Year 13.71 10 Project investment payback period (after income tax) Year 14.4 11 Financial internal rate of return of project investment (before income tax) ％ 6.14 12 Financial internal rate of return of project investment (after income tax) ％ 5.16 13 Project investment financial net present value (before income tax) Ten thousand yuan 13293.14 14 Project investment financial net present value (after income tax) Ten thousand yuan 13731.61

[0104] From the above, we can see that the basic financial indicators of Project 1 are: the project investment payback period (before income tax) is 13.71, which is less than 14 years; the net present value is 132.9314 million yuan, which is greater than zero; the project investment financial internal rate of return (before income tax) is 6.14%, which is greater than 6%.

[0105] After calculation, the project investment financial internal rate of return coefficient C1 = 0.023

[0106] Annual net cash flow deviation e1=1.632

[0107] Annual net cash flow from operating activities deviation e2=0.428

[0108] Annual net cash flow coefficient C2=69.942

[0109] Annual net cash flow coefficient from operating activities C3=18.337

[0110] The energy investment company takes the weight of the annual net cash flow coefficient W1 and the annual net cash flow coefficient W2 of the project as 0.5

[0111] Then the annual net cash flow risk score S1=69.942*0.5=34.971

[0112] Annual net cash flow risk score from operating activities S2 = 10.337 * 0.5 = 9.169

[0113] Project investment risk score S0 = S1 + S2 = 44.140

[0114] (2) Correspondingly, we further examine Project 2. The main financial evaluation parameters of Project 2 are as follows:

[0115] Serial number project unit Numeric 1 Total project investment Ten thousand yuan 114207.01 2 Construction Investment Ten thousand yuan 112000 3 Construction period interest Ten thousand yuan 1607.01 4 Liquidity Ten thousand yuan 600 5 Total sales revenue (excluding VAT) Ten thousand yuan 297345.13 6 Total cost Ten thousand yuan 217781.91 7 Total sales tax surcharge Ten thousand yuan 2910.8 8 Total Profit Ten thousand yuan 76652.43 9 Project investment payback period (before income tax) Year 13.58 10 Project investment payback period (after income tax) Year 14.3 11 Financial internal rate of return of project investment (before income tax) ％ 6.14 12 Financial internal rate of return of project investment (after income tax) ％ 5.26 13 Project investment financial net present value (before income tax) Ten thousand yuan 11817.81 14 Project investment financial net present value (after income tax) Ten thousand yuan 13343.64

[0116] From the above, we can see that the basic financial indicators of Project 2 are: the project investment payback period (before income tax) is 13.58, which is less than 14 years; the net present value is 118.1781 million yuan, which is greater than zero; the project investment financial internal rate of return (before income tax) is 6.14%, which is greater than 6%.

[0117] After calculation, the project investment financial internal rate of return coefficient C1 = 0.023

[0118] Annual net cash flow deviation e1=1.200

[0119] Annual net cash flow from operating activities deviation e2=0.590

[0120] Annual net cash flow coefficient C2=51.443

[0121] Annual net cash flow coefficient from operating activities C3=25.284

[0122] The energy investment company takes the weight of the annual net cash flow coefficient W1 and the annual net cash flow coefficient W2 of the project as 0.5

[0123] Then the annual net cash flow risk score S1 = 51.443*0.5 = 25.722

[0124] Annual net cash flow risk score from operating activities S2 = 25.284*0.5 = 12.642

[0125] Project investment risk score S0 = S1 + S2 = 38.364

[0126] If the S0 score is larger, it means that although the project meets the investment financial indicator requirements, the investment risk is greater; if the S0 score is smaller, it means that the project meets the investment financial indicator requirements and the investment risk is within a reasonable range.

[0127] From the results of the implementation cases, it can be seen that although Project 1 and Project 2 have the same project construction investment and financial internal rate of return, and similar project investment financial net present value and project investment payback period, the cash flow of Project 1 during the operation period fluctuates more significantly than that of Project 2. The investment risk is quantified using the method of the present invention, which intuitively shows that the investment risk of Investment Project 1 is higher than that of Investment Project 2.

[0128] The embodiments described above are only descriptions of the preferred modes of the present invention, and are not intended to limit the scope of the present invention. Without departing from the design spirit of the present invention, various modifications and improvements made to the technical solutions of the present invention by ordinary technicians in this field should all fall within the protection scope determined by the claims of the present invention.

Claims

1. A project investment evaluation method based on cash flow control, characterized in that: The steps include: (1) Based on historical project data and market conditions, forecast project construction investment, revenue, cost, and expenditure during the operation period, determine project measurement parameters, and obtain the project's annual cash inflows and outflows; (2) Based on the cash inflows and cash outflows, construct a project investment cash flow statement and a project financial plan cash flow statement; (3) Determine the project base discount rate, obtain the project investment financial internal rate of return based on the project investment cash flow statement, establish a project internal rate of return coefficient calculation method, and build a project internal rate of return coefficient calculation module; (4) Based on the cash flow statement of the project financial plan, establish a project cash flow coefficient calculation method and build a project cash flow coefficient calculation module; (5) Based on the project internal rate of return coefficient module and cash flow coefficient calculation module, a project investment risk assessment system is established to conduct a comprehensive evaluation and analysis of the project investment, including project investment profitability analysis and investment risk level analysis.

2. The project investment evaluation method based on cash flow control according to claim 1 is characterized in that: The basic evaluation criteria for the project investment profitability analysis in step (5) are: A. The financial internal rate of return of the project investment meets the benchmark rate of return requirement of the investment company, that is, FIRR ≥ IRR0; B. The financial net present value of the project investment is greater than zero, that is C. The project investment payback period meets the needs of the investment subject, that is, the relationship between the project investment payback period and the benchmark investment payback period: P t ≤P t0 ; Where i c is the discount rate, IRR0 is the project benchmark rate of return, FIRR is the project investment financial internal rate of return, P t is the project investment payback period, P t0 is the benchmark investment payback period, CI is the cash inflow, CO is the cash outflow, t represents the operating period in years, and n is the calculation period.

3. The project investment evaluation method based on cash flow control according to claim 2 is characterized in that: The premise of the project investment risk analysis in step (5) should first meet the basic project investment profitability analysis criteria; if so, a project investment risk assessment analysis is performed; if not, the project investment is directly judged to be high risk. The basic evaluation criteria for the project investment risk level are as follows: (1) If the project investment financial internal rate of return is greater than the project benchmark rate of return; (2) During the project operation period, the accumulated surplus funds shall be positive each year; The calculation formula of project investment internal rate of return is: Where FIRR is the financial internal rate of return, CI is the cash inflow, CO is the cash outflow, t represents the operating period, and n is the calculation period.

4. The project investment evaluation method based on cash flow control according to claim 3 is characterized in that: In the step (3), the financial internal rate of return of the project investment is the discount rate when the total present value of capital inflows is equal to the total present value of capital outflows and the net present value is equal to zero. The financial internal rate of return coefficient of the project investment is determined by the deviation value between the internal rate of return and the basic rate of return of the project. Project investment financial internal rate of return coefficient C1 = (FIRR-ΙRR0) / IRR0 In the formula, C1 is the internal rate of return coefficient, FIRR is the financial internal rate of return of the project investment, and IRR0 is the project benchmark rate of return.

5. The project investment evaluation method based on cash flow control according to claim 4 is characterized in that: The calculation formula for the project's annual net cash flow in step (2) is: NCF t =NCF at +NCFb t+ NCF ct Where NCF is the net cash flow in year t, at NCF is the net cash flow from operating activities. bt NCF is the net cash flow from investing activities. ct is the net cash flow from financing activities; Project operating net cash flow calculation formula: NCF at = sales revenue + output VAT + subsidy revenue + other revenue - operating costs - input VAT - sales tax surcharge - VAT - income tax - other outflows; Calculation formula for net cash flow from investing activities: NCF bt = Investment recovery income + dividend income + bond interest income + asset disposal income + other income - construction investment - maintenance investment - working capital - other outflows; Calculation formula for net cash flow from financing activities: NCF ct =Project capital + construction investment loan + working capital loan + bonds + short-term loans + other inflows - various interest expenses - repayment of debt principal - payable profit - other outflows.

6. The project investment evaluation method based on cash flow control according to claim 5 is characterized in that: In the step (4), the net cash flows of previous years are discounted based on the basic discount rate, the standard deviation of the net cash flows during the operation period is calculated, and the standard deviation of the net cash flows and the average annual net cash flows during the operation period are calculated to determine the net cash flow deviation; Average annual net cash flow Standard deviation of annual net cash flow Annual net cash flow deviation e1=σ1 / NCF0 Average annual net cash flow from operating activities Standard deviation of net cash flow from operating activities Deviation of annual net cash flow from operating activities e2=σ2 / NCF a0 Where N is the project operation period.

7. The project investment evaluation method based on cash flow control according to claim 6 is characterized in that: In the step (4), the annual net cash flow deviation, the annual operating net cash flow deviation and the investment financial internal rate of return deviation are compared to obtain the annual net cash flow coefficient and the annual operating net cash flow coefficient. Annual net cash flow coefficient C2 = e1 / C1 Annual net cash flow coefficient from operating activities C3 = e2 / C1.

8. The project investment evaluation method based on cash flow control according to claim 7 is characterized in that: In step (5), the net cash flow represents the viability of the project, and the net cash flow from operating activities represents the profitability of the project. The weight ratio of the evaluation index is allocated according to the different needs of the investment subject. The sum of the annual net cash flow coefficient weight W1 and the annual net cash flow coefficient W2 from operating activities is 1. The evaluation function of the project risk degree analysis is as follows: Annual net cash flow risk score S1=C2*W1 Annual net cash flow risk score from operating activities S2=C3*W2 Project investment risk score S0=S1+S2.

Images