In measuring cash flows we are interested only in the incremental after-tax cash flows that are attributed to the investment proposal being evaluated.

Question

Quizplus · Accepted Answer

This statement is correct. When evaluating an investment proposal, we are only interested in the cash flows that are directly attributed to the proposal and are relevanet to making investment decisions. We also consider after-tax cash flows, as they take into account the impact of taxes on the investment's profitability.

In Measuring Cash Flows We Are Interested Only in the Incremental