C. Cash Flow and Accounting Profit
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Let us do little research and get into a very practical discussion this week.
What is the difference between “Cash Flow” and “Accounting profit”?
Why do you think a manager puts more focus on cash flows rather than accounting profits in making our capital budgeting decisions?
Why are we interested only in incremental cash flows rather than total cash flows?
Please comment on other postings and/or provide relevant links for the discussion this week.
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