Conventional Cash Flow

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Dictionary Says

Definition of 'Conventional Cash Flow'

A series of inward and outward cash flows over time in which there is only one change in the cash flow direction. A conventional cash flow for a project or investment is typically structured as an initial outlay or outflow, followed by a number of inflows over a period of time. In terms of mathematical notation, this would be shown as -, +, +, +, +, +, denoting an initial outflow at time period 0, and inflows over the next five periods.

The term is particularly used in discounted cash flow (DCF) analysis. A conventional cash flow would have only one internal rate of return (IRR), making it a relatively easy task to choose among several projects or investments with such cash flows.

Investopedia Says

Investopedia explains 'Conventional Cash Flow'

A mortgage is a good example of a typical conventional cash flow. For example, a financial institution lends $300,000 to a homeowner or real estate investor at a fixed interest rate of 5% for 30 years. The lender then receives approximately $1,610 per month (or $19,325 annually) from the borrower towards mortgage principal repayment and interest. If annual cash flows are denoted by mathematical signs from the lender's point of view, this would appear as an initial -, followed by + signs for the next 30 periods.
Search results for

'Conventional Cash Flow'

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    ... Stocks Trade Why It Should Be Included In Your Portfolio Conventional wisdom suggests ...
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    ... Sometimes, investors should step back and compare the conventional wisdom on a story ...
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  • 3 Things You Need To Know About Groupon

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    ... onto this measure proves that Groupon is just another conventional public company. ...
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  • Canadian Royalty Trusts Offer Relative Safety And High Income

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    ... facing the prospect of having to pay out a higher portion of their free cash flow
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  • Solazyme May Pay Off On Green Dreams

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    ... Conventional methods of producing energy are cheap, easy and reliable, and those
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