Conventional Cash Flows and Non conventional Cash Flows

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Conventional Cash Flows

Conventional Cash Flows

In Conventional cash flows, cash outflow occurs only once at the start of the project.

Example of Conventional Cash Flows:

For example, when we take loan from banks, we withdraw whole amount from the account once and pay back to bank in installments till we pay off full principle amount plus any interest due on it. This way cash outflow occurs only once while banks receive cash inflows in the form of installments.Non conventional Cash Flows

In non conventional cash flows, cash outflows occur one or more times in addition to initial cash outflow.

Example of Non Conventional Cash Flows:

For example, when we request for cash line from banks to meet our day to day business needs, we withdraw only required amount from the account and deposit again when we have excess amount and this process goes on till the agreed period of time. After that you may request bank to renew the cash line facility if required or you can simply ask them to close the limit.

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