Which of the Following Best Describes Why Cash Flows Are

question 82

Multiple Choice

Which of the following best describes why cash flows are utilized rather than accounting profits when evaluating capital projects?

• A)Cash flows have a greater present value than accounting profits.
• B)Cash flows reflect the timing of benefits and costs more accurately than accounting profits.
• C)Cash flows are more stable than accounting profits.
• D)Cash flows improve the tax position of a firm more than accounting profits.
• E)None of the above.

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Definitions:

Higher-Order Conditioning

A form of learning where a stimulus is paired with a previously conditioned stimulus, causing the new stimulus to elicit the conditioned response without a direct association.

Extinction

In psychology, the process through which a conditioned response diminishes and eventually disappears as a result of the conditioned stimulus being presented without the unconditioned stimulus.

Conditioned Response

The learned response to a previously neutral stimulus that has become associated with an unconditioned stimulus in classical conditioning.

Food

Any nutritious substance that people or animals eat or drink to maintain life and growth.