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Which one of these statements is correct?

(A) When selecting one of two projects, managers should select the project with the higher total expected cash flow.

(B) Accountants record sales and expenses after the related cash flows occur. Individuals tend to prefer later cash flows over current cash flows.

(C) The value of an investment depends on the size, timing, and risk of the investment's cash flows.

(D) Most investors prefer greater risk over less risk.

Respuesta :

Answer:

(A) When selecting one of two projects, managers should select the project with the higher total expected cash flow.

Explanation:

  • When running a business the managers must take into account the type of business entity they are dealing with and also find the projects that deliver maximum returns and give them the maximum benefits.
  • The business run by the sole owners must be based on generating a good client base and reducing the cost associated with the company.
  • Thus it's essential to select the cash flow with a high amount of growth and lower risks.

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