In most capital budgeting decisions, the emphasis should be on reported earnings rather than cash flows.
Cash flow is given more emphasis in capital budgeting decisions than earnings.

Question

Quizplus · Accepted Answer

In capital budgeting decisions, the emphasis should be on cash flows rather than reported earnings. This is because cash flows represent the actual cash that a project is expected to generate, while reported earnings can be affected by accounting methods and non-cash items such as depreciation. It is important to consider both cash flows and earnings, but cash flows should be the primary focus in capital budgeting decisions.

In Most Capital Budgeting Decisions, the Emphasis Should Be on Reported