Regarding cash flow, which of the following is true?

Multiple Choice

• Cash flow measures changes in the firm's cash account.

• In evaluating capital budgeting decisions, cash flows should be valued on a pre-tax basis for consistency's sake.

• Incremental cash flows should include opportunity costs but ignore sunk costs.

• Cash flow should be recognized only when it has accrued according to GAAP practices.

• After-tax cash flow is usually identical to accounting profits when accrual accounting is used for financial statement purposes.