Most top executives are graded primarily on their results in terms of net income rather than net cash flow Why, then, is capital budgeting done with incremental cash flows rather than with incremental net income ...

Net income is an accounting construction designed to indicate the longte ...

Most top executives are graded primarily on their results in terms of net income rather than net

Question:

Most top executives are graded primarily on their results in terms of net income rather than net cash flow. Why, then, is done with incremental cash flows rather than with incremental net income?

Capital Budgeting
Capital budgeting is a practice or method of analyzing investment decisions in capital expenditure, which is incurred at a point of time but benefits are yielded in future usually after one year or more, and incurred to obtain or improve the...