In terms of the capital budgeting process, net cash flows are
A)the net cash outlays required to place a project in service.
B)the funds invested in additional assets.
C)incremental changes in a firm's cash flow.
D)the outlays that have already been made.

Question

Quizplus · Accepted Answer

Net cash flows refer to the incremental changes in a firm's cash flow that result from a specific project or investment. These cash flows can be either inflows or outflows and are a critical component of the capital budgeting process, as they provide the basis for determining the project's profitability and its potential to create shareholder value. Options A, B, and D, while potentially relevant to the capital budgeting process, do not specifically relate to net cash flows.

In Terms of the Capital Budgeting Process, Net Cash Flows