Question:
Explain why does the capital budgeting rely on analysis of cash flows rather than on net income?
See Also
Is Net Income or Operating Cash Flow More Important From a Finance Perspective?The 1% Rule in Multifamily Real EstateFree Cash Flow ValuationCash Flow:
Cash flow refers to the inflow and outflow of cash during the process of operating a business. It is the real money that the company receives and pays during its regular operations. Cash flows are an important factor when evaluating projects.
Answer and Explanation:
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In short, capital budgeting relies on cash flow analysis because cash flows show the exact amount of money a project makes rather than being affected...
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