Which of the following best describe why cash flows are utilized rather than accounting profits when evaluating capital projects?
A) Deducting interest expense from income and also including it in the discount rate would result in double counting.
B) Cash flows reflect the timing of benefits and costs more accurately than accounting profits.
C) Cash flows are more stable than accounting profits.
D) Both A and B.
Correct Answer:
Verified
Q1: Incremental cash flows from a project =
A)
Q2: Which of the following is NOT considered
Q3: Which of the following would be considered
Q8: Which of the following cash flows should
Q9: Holding all other variables constant, which of
Q15: The calculation of differential cash flows over
Q16: When evaluating Capital Budgeting decisions, which of
Q18: Depreciation expenses affect tax-related cash flows by
A)
Q19: Which of the following cash flows are
Q20: Which of the following is NOT part
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents