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Can a project have negative cash flows for the first few years before having positive cash...

Can a project have negative cash flows for the first few years before having positive cash flows? Explain your answer

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Answer #1

Positive cash flow is when a company has more cash left after all the expenses are paid out whereas negative cash flow is when cash is paid out more than it is receiving.

Yes, in my opinion, a project can have negative cash flows for the first few years before having some positive cash flows. In case of negative cash flows in a project, a company can't reinvest the cash into the project. Negative cash flows can also indicate an investment for long term success rather than actually getting some earnings.

Hope this helps :)

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