Do I consider savings as positive cash flows?

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Posted by Julia on April 29, 2008 at 11:52:28:

Hello,
I am working on an assignment for my finance class where I have to evaluate the purchase of another factory. In order to calculate the NPV I try to adjust all the cash flows.
Now my question is: The text says that the company will save 100,000 per year when buying the factory. Are these savings cash flows then? So do I have to add 100,000 per year to get the real cash flow?
I hope you can help me!
Thank you very much,
Julia

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