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:

Regional Metamorphism

The process of rock alteration over wide areas under the influence of high pressure and temperature, typically associated with mountain building.

Contact Metamorphism

A type of metamorphism that occurs when rocks are heated by the intrusion of hot magma without melting.

Subduction

The process whereby one tectonic plate moves under another plate and is forced to sink into the mantle, often leading to volcanic activity and earthquakes.

Normal Faulting

A type of faulting where the crust is extended and the hanging wall moves down relative to the footwall.