Which three of the following statements accurately relate to profits and cash flows?
A) Project planning decisions should be focused primarily on a search for profit.
B) Profit is a poor substitute for cash flow.
C) Depreciation is not a cash flow and should be excluded from profit figures.
D) Working capital adjustments may be needed to modify profit figures for NPV analysis.

Question

Quizplus · Accepted Answer

A - Project planning decisions should not solely focus on profit as cash flow is equally important. 
B - This statement is accurate as profit does not necessarily indicate good cash flow management. 
C - Depreciation is not a cash flow and should be added back to calculate cash flow from operations. 
D - Working capital adjustments are often required to ensure accurate profit figures are used in NPV analysis.

Which Three of the Following Statements Accurately Relate to Profits