Information in the income statement helps users to
a. evaluate the past performance of the enterprise.
b. provide a basis for predicting future performance.
c. help assess the risk or uncertainty of achieving future cash flows.
d. all of these.
Answer: d. all of these.
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Indicate whether the statement is true or false
Which of the following is characteristic of the parent's perspective in capital budgeting?
A) It estimates future cash flows from the project in the functional currency. B) It adds the subsidiary's after-tax operating cash flows with the project's cost of capital. C) It seldom uses the currency of the primary economic environment in which it operates. D) It estimates the incremental after-tax operating cash flows in the subsidiary's local currency.