Relevant cash flows for investment decisions are:

Question

Quizplus · Accepted Answer

The relevant cash flows for investment decisions are the expected cash flows that will differ between alternatives. These cash flows represent the future inflows and outflows of cash that will result from a particular investment decision and are used to calculate metrics such as net present value and internal rate of return. Actual cash flows that do not differ between alternatives (choice A) or expected cash flows that do not differ between alternatives (choice C) are not as important in making investment decisions. Actual cash flows that differ between alternatives (choice D) may be useful in certain cases, but they do not represent the future cash flows that are necessary for calculating investment metrics.

Relevant Cash Flows for Investment Decisions Are