In using the net present value (NPV)method for capital budgeting after-tax cash flows should be used instead of pre-tax cash flows when taxes are a consideration.

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This is true. The net present value method takes into account the time value of money and adjusts the cash flows for the cost of capital. When taxes are a consideration, it is important to use after-tax cash flows to calculate the net present value since taxes can have a significant impact on the overall profitability of a project.

In Using the Net Present Value (NPV)method for Capital Budgeting