The Present Value of the Expected Net Cash Inflows for a Project

question 65

Multiple Choice

The present value of the expected net cash inflows for a project will most likely exceed the present value of the expected net profit after tax for the same project because

• A) Income is reduced by taxes paid,but cash flow is not.
• B) There is a greater probability of realizing the projected cash flow 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 flow is not.
• E) Cash flow reflects any change in net working capital,but sales do not.