Capital Budgeting Projects Typically Assume That All Cash Flows Transpire

question 22

Multiple Choice

Capital budgeting projects typically assume that all cash flows transpire at the end of the year.The reason for this is that:

• A) less tax liability results from this practice.
• B) balance sheets are prepared at the end of the year.
• C) it is easier for the analyst in this manner.
• D) most corporations collect their cash at the end of the year.

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Definitions:

Financial Capital

Economic resources measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provide their services.

Primary Markets

Financial markets where new securities are issued and sold for the first time to investors, such as initial public offerings (IPOs).