Determining Cash Flows Demand Business Judgment and Perspective

What steps should the evaluation of an investment opportunity involve?

The process of evaluating an investment opportunity depends on a variety of factors. First, the investment opportunity needs to be analyzed in terms of investment. Investment determines how much money is required in the project and how much money will be returned.

Second, the opportunity is weighted for riskiness. Investors are particular in risky businesses so require more convincing returns. Other investors don't want high risk since they have the belief that the higher risk, the higher the chance of losing their investment.

Third, ...