The current cash flow from existing assets is highly relevant to the investor.However, since the value of the firm depends primarily upon its growth opportunities, profit projections from those opportunities are the only relevant future flows with which investors are concerned.

Question

Quizplus · Accepted Answer

While growth opportunities and their profit projections are crucial, investors also consider the current cash flow from existing assets as it reflects the firm's present health and ability to generate revenue, which is fundamental for sustaining operations and funding future growth.

The Current Cash Flow from Existing Assets Is Highly Relevant