--%>
Assignment Help - homework help

Why do focusing on cash flows rather than profits

Why do we focus on cash flows rather than profits while evaluating proposed capital budgeting projects?
We targeted on cash flows instead of profits while evaluating proposed capital budgeting projects since it is cash flow that changes the value of a firm. You can spend cash however you cannot spend profit.

   Related Questions in Finance Basics

  • Q : Define Reversion Reversion : The return

    Reversion: The return of the unused part of an appropriation to the fund from which the appropriation was made, usually two years (that is, four years for federal funds) after the last day of an appropriation’s accessibility period. The Budget A

    		•
  • Q : Clarify trade credit is free credit or

    Trade credit is free credit. Do you agree or conflicting with this statement? Clarify. Trade credit is not free. It contains a cost. Who bears that cost based on the terms of the transaction among the grantor and the recipient of the trade c

    		•
  • Q : Describe utilization of a risk-adjusted

    Describe how utilizing a risk-adjusted discount rate develop capital budgeting decision making compared to utilizing a single discount rate for all projects? The risk-adjusted discount rate develop capital budgeting decision making compared to t

    		•
  • Q : Fixed Income I need solution by Tuesday

    I need solution by Tuesday evening March 18, 6 pm EST

    		•
  • Q : Depict the slope of the line Normal 0

    Normal 0 false false

  • Q : Describe usual pattern of cash flows

    Describe usual pattern of cash flows for share of preferred stock? How does the market fidn out the value of a share of preferred stock, given these promised cash flows?Preferred stock contains no maturity date hence, it has no maturity value.

    		•
  • Q : Explain intermediation Explain

    Explain intermediation.The financial system makes it achievable for surplus and deficit economic units to come together, exchanging funds for securities, to their mutual profit. While funds flow from surplus economic units to a financial institu

    		•
  • Q : What are Summary Schedules Summary

    Summary Schedules: Different schedules in the Governor’s Budget Summary that summarize state revenues, expenditures and other fiscal and personnel data for the past, present, and budget years.

    		•
  • Q : Explain compound interest Normal 0

    Normal 0 false false

  • Q : Determine per unit cost of production

    Normal 0 false false