Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. on capital budgeting area, discuss why do managers

On capital budgeting area, discuss why do managers focus on the impact that an investment will...

90.2K

Verified Solution

Question

Finance

On capital budgeting area, discuss why do managers focus on theimpact that an investment will have on reported earnings ratherthan on the investment’s cash flow consequences?

Please explain in detail with examples for 3-4 paragraph.

Answer & Explanation Solved by verified expert
4.2 Ratings (450 Votes)
Answer The managers will generally look business in a way of increasing Earnings per share EPS or Return on equity ROE that will help them earn their bonus it is usually safe to assume that the income statement will overstate profits Operating cash flow OCF of a company is arguably the most important barometer that investors use for judging corporate wellbeing Even though many investors incline towards net income operating cash flow is often seen as a better metric of a companys financial health for two important    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

On capital budgeting area, discuss why do managers focus on theimpact that an investment will have on reported earnings ratherthan on the investment’s cash flow consequences?Please explain in detail with examples for 3-4 paragraph.

Other questions asked by students

Q

4. How can you determine if an item is a whole grain? 5. What are THREE...

Medical Sciences
Q

Use the exact values you enter to make later calculations. A ray of light strikes a...

Physics
Q

The spectral line for a given element in light received from distant star is shifted...

Physics
Q

a COS X 1 2 where 0 x 2 2 marks

Algebra
Q

For a business organized as a general partnership, which statement is true? A....

Accounting
Q

Ivanna, who has three children under age 13, worked full-time while her husband, Sergio, was...

Accounting
Q

To be useful to management accountants for planning and predictive purposes, mixed costs: a Must...

Accounting
Q

The weighted average method computes (blank) to determine the total amount of costs transferred out...

Accounting
Q

The excess of face value over issue price is called the ...

Accounting
Q

On January 1, 2022, Frame Industries purchased a delivery vehicle costing $13,850. The vehicle has...

Accounting
Q

AC Motors is a sole proprietorship that has taxable income of $94,200. How much additional...

Accounting
Q

True or false if the purchase price of retired stock exceeds the net amount removed...

Accounting