What is the primary difference between net income and cash flow to an investor? A :...

What is the primary difference between net income and cash flow to an investor?

A : Net income includes depreciated expenditures, whereas cash flow only accounts for current capital expenditures made by the company.
B : Net income is profit from revenue minus expenses, whereas cash flow is the amount of revenue incoming and outgoing from the business.
C : Net income accounts for expenses, whereas cash flow to investors also accounts for the sale of securities to debt holders and shareholders.
D : Net income covers profits and monies made from securities, whereas the cash flow to an investor does not include profits.

Expert Solution

The correct answer is Option B

The Net income measures the difference betweent the revenues of the company less all the expenses and the cash flow to the investors refer to the cash Inflows and outflows from the company point of view.

jeff jeffy answered 2 years ago

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