When managers use a discounted cash flow analysis method for investment projects, which of the following factors are not considered when projecting cash flows?

Question

Quizplus · Accepted Answer

Historical accounting is not considered because discounted cash flow analysis projects future cash flows and does not rely on past accounting records. Factors such as knowledge of market conditions, likely reactions from competitors, and economic trends are considered when projecting cash flows because they can impact the future performance of an investment.

When Managers Use a Discounted Cash Flow Analysis Method for Investment