Operating cash flows rather than accounting income are listed in Table 12.1. Why do we...
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Accounting
Operating cash flows rather than accounting income are listed in Table 12.1. Why do we focus on cash flows as opposed to the net income in capital budgeting? Explain why sunk costs should not be included in a capital budgeting analysis but opportunity costs and externalities should be included.
FCF = Depreciation EBIT(1 T) + and amortization ] - [expenditures ANet operating + expenditures working capital
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