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Cash vs. Profit as King

Agree or disagree. Why?

Cash -- Not Profits -- is King. In measuring value we will use cash flows rather than accounting profits because it is only cash flows that the firm receives and is able to reinvest.

Solution Preview

Please see response attached (also below) I hope this helps and take care.

RESPONSE:

Agree or disagree. Why?

Cash -- Not Profits -- is King. In measuring value we will use cash flows rather than accounting profits because it is only cash flows that the firm receives and is able to reinvest.

Response:

Although there are opponents on both sides, there is some compelling evidence to support this statement. Why? When planning the short- or long-term funding requirements of a business, for example, it is more important to ...

Solution Summary

Referring to the fact that in measuring value we will use cash flows rather than accounting profits because it is only cash flows that the firm receives and is able to reinvest, this solution debates the statement: Cash -- Not Profits -- is King.

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