Which of the following factors is most important in investment decisions?
A) The change in earnings before taxes.
B) The change in gross sales revenue.
C) The change in net income.
D) The change in after-tax cash flow.

Question

Quizplus · Accepted Answer

The change in after-tax cash flow is most important in investment decisions because it represents the actual cash generated by the investment that can be reinvested or distributed to shareholders. Earnings before taxes and gross sales revenue can be influenced by factors such as accounting methods and market trends, while net income can be impacted by taxes and non-cash items. After-tax cash flow is the most reliable indicator of the investment's profitability.

Which of the Following Factors Is Most Important in Investment