Why do we focus on cash flows instead of profits, Financial Management

Assignment Help:

Why do we focus on cash flows instead of profits when evaluating proposed capital budgeting projects?

We focus on cash flows at the place of profits when evaluating proposed capital budgeting projects because it is cash flow that changes the value of a firm.  You can spend cash but you can't spend profit. 

 


Related Discussions:- Why do we focus on cash flows instead of profits

Expalin the term company objectives, Expalin the term Company Objectives ...

Expalin the term Company Objectives Financial management is anxious with making decisions about the provision and use of a firm's finances. A rational method to decision-making

Management of finacial institutions, what are the features of a comprehensi...

what are the features of a comprehensive interest rate risk management programme

Computation of working capital, Will you please define the working capital ...

Will you please define the working capital and Calculation of working capital? I need urgent help in my assignment. help me!

Explain retail and wholesale banks in commercial banking, Explain about the...

Explain about the retail and wholesale banks in the commercial banking. Retail and wholesale banks: Commercial banking can also be separated within retail and wholesale b

Illustrate the structure of financial markets, Illustrate the structure of ...

Illustrate the structure of financial markets? Structure of financial markets: Financial markets can be categorized onto the basis of several parameters as follows: the n

Determine the cost of capital in emerging nation, How can we measure a comp...

How can we measure a company's cost of capital in emerging nations, especially when there is no state bond which we could take as a reference? Although there is no state bond w

Explain about death benefit, Q. Explain about Death Benefit? Death Bene...

Q. Explain about Death Benefit? Death Benefit - Amounts received under a life insurance contract and paid by reason of death of the insured. (Even though most death benefits ar

Interpretations of long term solvency or liquidity ratio''s, Long Term Solv...

Long Term Solvency or Liquidity Ratio's   DE:          The Debt Equity ratio exhibits the relation that exists between debt and proprietor's fund and is considered a very im

Mortgage-backed bonds, Unlike the mortgage pass-through securities, t...

Unlike the mortgage pass-through securities, the mortgage-backed bonds are debt obligations of the mortgage originator. Every issue of such bonds should be backed

Define a sunk cost, What is a sunk cost?  Is it relevant while evaluating a...

What is a sunk cost?  Is it relevant while evaluating a proposed capital budgeting project?  Explain. A sunk cost is a cash flow which has previously occurred, or that will take

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd