Net cash flow can be calculated by adjusting the projected n

Net cash flow can be calculated by adjusting the projected net income from a project for any non-cash revenues and expenses

True or Flase and why

Solution

Answer: True:

Projected net income is an accounting measure. It takes into account revenues and expenses that are mere adjustment entries tht do not involve any cash movement; like depreciation, amortization. Hence, the net income would not give the actual cash flow.

To get the actul cash flow, net income has to be adjusted for the non cash items of incomes and expenses.