Cash flows that should be considered for decision in hand are classified as____________?
Correct answer: A. Relevant cash flows
- A. Relevant cash flows
- B. Irrelevant cash flows
- C. Marginal cash flows
- D. Transaction cash flows
Explanation
Relevant cash flows are future cash flows that differ between decision alternatives, so they can affect the choice. Past or unchanged cash flows are irrelevant to the decision.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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