Question

What is one of the major aspects to keep in mind when preparing an expected cash flow estimate for a project?

a.

NPV rule is expressed in terms of accounting data

b.

Accounting data is irrelevant to NPV calculations

c.

NPV rule is expressed explicitly in terms of cash flows, not accounting data

d.

Cash flows are not relevant to NPV calculations

Posted under IC 89 Management Accounting

Answer: (c).NPV rule is expressed explicitly in terms of cash flows, not accounting data Explanation:One of the major aspects to keep in mind when preparing an expected cash flow estimate for a project is that the NPV rule is expressed explicitly in terms of cash flows, not accounting data.

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Q. What is one of the major aspects to keep in mind when preparing an expected cash flow estimate for a project?
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