This workbook provides a detailed description of how to plan and build a pre-financial close Project Finance cash flow model. Providing sufficient theory to give the context for each modelling topic, it focuses on detailed practical methods. Topics covered include treatment of flexible timing assumptions, inflation, multiple currencies, circular calculations, debt and equity calculations, cover factors and IRRs and the use of the model to produce alternative base case scenarios and sensitivity cases. The new edition includes revisions to methods and techniques and new topics developed in response to market changes. Includes a new section on optimization, covering the theory and practice of optimising revenues and/or funding structures to meet specific constraints such as cover factor and IRR requirements, whilst targeting outcomes such as lowest achievable NPV of project revenues. The workbook concludes with a series of exercises which work through the process of building a model from a set of illustrative data. Spreadsheets accompany the workbook and have been re-written to reflect the methods and principles in the new edition, and to include the new topics. Where relevant the new edition also describes processes for both 2003 and 2007 versions of Excel.