Most capital budgeting techniques focus on cash flows because evaluation of capital projects requires comparing the
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Most capital budgeting techniques focus on cash flows because
• evaluation of capital projects requires comparing the return on such projects with the cost of cap¬ ital, which is calculated using actual net cash flows rather than accounting accruals.
• cash flows from a capital project can be com¬ pared with the cash returns provided from debt investments (in the form of interest) and stock investments (in the form of dividends). LO.1
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Related Book For
Cost Accounting Foundations And Evolutions
ISBN: 9780324235012
6th Edition
Authors: Michael R. Kinney, Jenice Prather-Kinsey, Cecily A. Raiborn
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