The Cash Flow Forecast

All of the incremental revenues and expenses that will be created if the investment is made should be included in the forecast. The key term here is incremental. No existing expenses or overhead amounts should be allocated to the project. They already exist and will not be affected.

	Revenue
−	Cost of Goods Sold
=	Gross Profit
−	Incremental Overhead
=	Operating Income
−	Depreciation
=	Net Income Before Tax
−	Income Tax
=	Net Income
+	Depreciation
=	After-Tax Cash Flow