Most firms generate cash inflows every day, not just once at the end of the year. In capitalbudgeting, should we recognize this fact by estimating daily project cash flows and thenusing them in the analysis? If we do not, are our results biased? If so, would the NPV bebiased up or down? Explain.

Most firms generate cash inflows every day, not just once at the end of the year. In capitalbudgeting, should we recognize this fact by estimating daily project cash flows and thenusing them in the analysis? If we do not, are our results biased? If so, would the NPV bebiased up or down? Explain.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk

Section: Chapter Questions

Problem 8Q

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