单选题 Ashlyn Lutz makes the following statements to her supervisor, Paul Ulring, regarding the basic principles of capital budgeting: Statement 1: The timing of expected cash flows is crucial for determining the profitability of a capital budgeting project. Statement 2: Capital budgeting decisions should be based on the after-tax net income produced by the capital project. Which of the following regarding Lutz's statements is most accurate? Statement 1 Statement 2 A. Correct Correct B. Incorrect Correct C. Correct Incorrect

【正确答案】 C

【答案解析】Lutz's first statement is correct. The timing of cash flows is important for making correct capital budgeting decisions. Capital budgeting decisions account for the time value of money. Lutz's second statement is incorrect. Capital budgeting decisions should be based on incremental after-tax cash flows, not net (accounting) income.