Assume you are the CEO of a local YMCA. You and your administrative team are con
ID: 2648945 • Letter: A
Question
Assume you are the CEO of a local YMCA. You and your administrative team are considering making an investment in a day care facility to meet the ongoing child care needs of your members. What would the role of good cash flow estimates be as part of this investment equation? Assume you are the CEO of a local YMCA. You and your administrative team are considering making an investment in a day care facility to meet the ongoing child care needs of your members. What would the role of good cash flow estimates be as part of this investment equation?Explanation / Answer
Lets assume YMCA has 100 members out of whom 70 require a day care. Now lets assume that the cost per child per member in a day care will be $200 and the investment of the infrastructure in the day care will be $1000.
That is the cost for 70 members (assuming every member has 1 child to be put in day care) will be 70*200= $14,000
Total Cash Outflow will be 14000+1000= $15000
The cash inflow will be in the form of increased productivity and less number of leaves on part of employees leading which would ultimately increase the revenue of the firm balancing the cash flow equation.
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