A target's previous cash flows are typically an accurate indicator of future cash flows, especially when the target's cash flows would have to be converted into the acquirer's home currency as they are remitted to the parent.

Question

Quizplus · Accepted Answer

Past cash flows may not accurately predict future cash flows due to various factors such as changes in the business environment, competition, and currency exchange rate fluctuations, especially when converting to the acquirer's home currency.

A Target's Previous Cash Flows Are Typically an Accurate Indicator