Forecasting risk emphasizes the point that the correctness of any decision to accept or reject a project is highly dependent upon the:
A)method of analysis used to make the decision.
B)initial cash outflow.
C)ability to recoup any investment in net working capital.
D)accuracy of the projected cash flows.
E)length of the project.

Question

Quizplus · Accepted Answer

Forecasting risk refers to the risk that the projected cash flows may not materialize as expected due to unforeseen events or errors in estimation. Therefore, the correctness of the decision to accept or reject a project depends highly on the accuracy of the projected cash flows, as it affects the expected return on investment and the feasibility of the project.

Forecasting Risk Emphasizes the Point That the Correctness of Any