An argument against using the price to cash flow (P/CF) valuation approach is that:
A) non-cash revenue and net changes in working capital are ignored when using earnings per share (EPS) plus non-cash charges as an estimate.
B) cash flows are not as easy to manipulate or distort as EPS and book value.
C) price to cash flow ratios are not as volatile as price-to-earnings (P/E) multiples.
Answer: A
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