Which of the following statements about project cash flows is false?
A)Opportunity costs--e.g., cash flows that would be generated by an alternative project--should be included in your cash flow analysis.
B)Although most projects involve both financial and non-financial costs and benefits, the non-financial items are typically minor and can be ignored when estimating a project's
Value.
C)In order to accurately evaluate a project's effect on value, it is necessary to quantify any non-financial costs and benefits.
D)Both B and C are false statements.

Question

Quizplus · Accepted Answer

This statement is false. Non-financial costs and benefits can have a significant impact on a project's value and should not be ignored when estimating cash flows. Non-financial costs and benefits cannot always be ignored when estimating a project's value. In some cases, they may actually have a significant impact on the project's success and ultimate value. Therefore, it is important to carefully consider and quantify all potential costs and benefits when evaluating a project's cash flows. Choice A is true, and choice C is partially true but can be expanded to include the importance of considering non-financial costs and benefits.

Which of the Following Statements About Project Cash Flows Is