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5. If investors are truly interested in knowing a companys future cash flows, why would they care about current earnings?
a. Net income provides an estimate of sustainable annualized long-run future free cash flows.
b. Accruals and deferrals imitate the lumpiness inherent in year-to-year cash flows.
c. Investors are better able to predict a companys future free cash flows using accrual earnings than by using realized cash flows.
d. All of the above.
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