Accounting profits,adjusted for taxes and differences in accounting methods,provide the best measure of relevant cash flows for capital budgeting purposes.

Question

Quizplus · Accepted Answer

Accounting profits are not always representative of relevant cash flows for capital budgeting purposes, as they may not account for changes in working capital, timing of cash flows, and other non-cash expenses. Therefore, adjustments and considerations beyond accounting profits are necessary to determine relevant cash flows.

Accounting Profits,adjusted for Taxes and Differences in Accounting Methods,provide the Best