Financial managers face a challenge in accurately forecasting cash flows as they must analyze only relevant cash flows.

Question

Quizplus · Accepted Answer

Financial managers must consider only those cash flows that are relevant to their decision-making process. These may include future cash inflows and outflows associated with investment projects, financing decisions, working capital management, and other operational activities. Accurately forecasting cash flows is important for making sound financial decisions and maximizing shareholder value.

Financial Managers Face a Challenge in Accurately Forecasting Cash Flows