Which of the following is (are) a risk associated with projects that must be considered when determining the net present value?
I. Financial risk
II. Pure project risk
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements I and II are correct.
D) Neither statement I nor II is correct.

Question

Which of the following is (are) a risk associated with projects that must be considered when determining the net present value? 
I. Financial risk
II. Pure project risk
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements I and II are correct.
D) Neither statement I nor II is correct.

Quizplus · Accepted Answer

Both financial risk and pure project risk can have an impact on the net present value of a project. Financial risk refers to the risk that the project may not generate the expected cash flows due to factors such as inflation, interest rates, or currency fluctuations. Pure project risk, on the other hand, refers to the risk that the project may not be completed on time, within budget, or to the expected quality. Both of these risks need to be considered when determining the net present value of a project.

Which of the Following Is (Are) a Risk Associated with Projects