The Present Value of the Expected Net Cash Inflows of All

question 2

Multiple Choice

The present value of the expected net cash inflows of all the projects undertaken by a firm will most likely exceed the present value of the firm's expected net profit after tax, because:

• A) income is reduced by taxes paid, but cash flow is not.
• B) there is a greater probability of realizing the projected cash flows than the forecasted income.
• C) income is reduced by dividends paid, but cash flow is not.
• D) income is reduced by depreciation charges, but cash flows are not.
• E) cash flows lead to changes in net working capital, but sales do not.

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Definitions:

Blood Clotting

A biological mechanism wherein blood cells and fibrin strands form a clot to stop bleeding and begin repair of the damaged vessel.

Cardiac Output

The volume of blood the heart pumps through the circulatory system in a minute.

Stroke Volume

The amount of blood ejected by the left ventricle of the heart in one contraction.

Lymphatic System

A subsystem of the cardiovascular system; returns excess interstitial fluid (lymph) to the circulation; defends the body against disease organisms.