The reason cash flow is used in capital budgeting is, Ask an Expert

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The reason cash flow is used in capital budgeting is because

cash rather than income is used to purchase new machines.

cash outlays need to be evaluated in terms of the present value of the resultant cash inflows.

All of these options

to ignore the tax shield provided from depreciation would ignore the cash flow provided by the machine, which should be reinvested to replace older machines.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92405018

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