If a user wanted to predict the future cash flows of the company, which method of valuing capital assets would be more useful?

Question

Quizplus · Accepted Answer

Replacement cost method values an asset based on the cost to replace it with a similar asset in the current market. This method would be more useful for predicting future cash flows as it takes into account the current market conditions and the cost required to replace the assets in the future. This is important for predicting cash flows because as assets deteriorate or become obsolete, the cost to replace them may increase, affecting future cash flow projections.

If a User Wanted to Predict the Future Cash Flows