This technical note is a summary of the second chapter of the book “Dirección de Negocios y Creación de Valor”. It discusses how value creation is measured and how to avoid overlooking cash flows. Students gain insight into how value creation is measured through a practical example.

The document delves into which types of cash flows we should consider, opportunity cost, sunk costs, depreciation costs, assigned expenses, and sale of assets. It wraps up with a set of rules that can help us avoid overlooking cash flows and then a set of rules we must apply to the economic analysis of any decision.