Question: What are the differences between cash flows used in capital budgeting calculations and past accounting earnings? Suppose that Gatas Corporation already has divisions in both

What are the differences between cash flows used in capital budgeting calculations and past accounting earnings?

Suppose that Gatas Corporation already has divisions in both Indiana and Los Angeles. Gatas is now considering setting up a third division in Austin. This expansion will require one senior manager from Indiana and one from Los Angeles to relocate to Austin. Ignore relocation expenses. Is their annual compensation relevant to the decision to expand?

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