The focus in capital budgeting is on a. Favorable and unfavorable variance b. Expenses under accrual accounting c. Expected future cash flows that differ between alternatives d. Allocation of overheads

The focus in capital budgeting is on a. Favorable and unfavorable variance b. Expenses under accrual accounting c. Expected future cash flows that differ between alternatives d. Allocation of overheads

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk

Section: Chapter Questions

Problem 8MC

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Question

The focus in capital budgeting is on

	a.	Favorable and unfavorable variance
	b.	Expenses under accrual accounting
	c.	Expected future cash flows that differ between alternatives
	d.	Allocation of overheads

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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