Which of the Following Rules Is Essential for Successful Cash

Multiple Choice

Which of the following rules is essential for successful cash flow estimates, and ultimately, to successful capital budgeting?

A) The return on invested capital is the only relevant cash flow.
B) Only incremental cash flows are relevant to the accept/reject decision.
C) Total cash flows are relevant to capital budgeting analysis and the accept/reject decision.
D) Inflation is considered while estimating incremental cash flows.
E) Shipping and installation costs are included in cash flow estimation.