Capital budgeting requires companies to determine free cash flows,which are affected by factors such as local tax rates.

Question

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Capital budgeting involves assessing the potential cash flows that a project could generate. Free cash flows are an important aspect of this analysis, as they represent the cash that is available to a company after accounting for all necessary expenses. Local tax rates can have an impact on free cash flows, as they will affect the amount of taxes that a company needs to pay on its profits. Therefore, companies need to take local tax rates into account when determining their free cash flows and making capital budgeting decisions.

Capital Budgeting Requires Companies to Determine Free Cash Flows,which Are