Generally, the most diﬃcult part of utilizing the net present value concept is:
A) Determining the initial cash outﬂow required to start a project.
B) Computing the net present value once the discount rate and cash ﬂows are determined.
C) Determining whether the discount rate used is higher or lower than the internal rate of return.
D) Estimating the future cash ﬂows given the initial investment in the project.
E) Making the accept/reject decision once the net present value is computed.

Question

Quizplus · Accepted Answer

Estimating future cash flows is the most difficult part of utilizing the net present value concept because it requires making predictions about uncertain future events, such as market conditions and consumer demand, which can be challenging and potentially inaccurate.

Generally, the Most Diﬃcult Part of Utilizing the Net Present