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Question
The present value of the expected net cash inflows for a project will most likely exceed the present value of the expected net profit after tax for the same project because
a. Income is reduced by taxes paid, but cash flow is not.
b. There is a greater probability of realizing the projected cash flow than the forecasted income.
c. Income is reduced by dividends paid, but cash flow is not.
d. Income is reduced by depreciation charges, but cash flow is not.
e. Cash flow reflects any change in net working capital, but sales do not.
Answer
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