Question

In capital budgeting analysis, the cash flows are estimated based on:a.forecasts of future cash revenues, expenses, and investment outlays.b.forecasts of retained earnings available for financing projects.c.forecasts of weathermen.d.historical estimates.

Answer 1

Answer:

a.forecasts of future cash revenues, expenses, and investment outlays

Explanation:

The capital budgeting analysis is the analysis in which the company analyses the projects in terms of risk, return that would expected in near future. In this, the present value should be determined by applying the discount rate.

Now as per the given situation, the cash flows that are predicted would be depend upon the future cash revenues i.e. forecasted, its expenses and the outlays of the investment

Therefore the option a is correct

And, the same is to be considered