In measuring value,the firm's focus should be on:
A)cash flow.
B)accounting profits.
C)time value of money.
D)earnings per share.

Question

Quizplus · Accepted Answer

Cash flow is a more accurate measure of a firm's value as it accounts for the time value of money and considers all outflows and inflows of cash. Accounting profits and earnings per share can be manipulated through accounting methods, while time value of money is already incorporated in cash flow. Therefore, the firm's focus should be on maximizing its cash flow to increase its overall value.

In Measuring Value,the Firm's Focus Should Be On