Closet Keeper is considering a new project.Which one of these estimated project values has the greatest level of certainty?
A)The amount of the cash inflow in Year 3
B)The timing of the last cash inflow from the project
C)The initial project cost
D)The risk of a pessimistic scenario occurring
E)The amount of the cash inflow in Year 1

Question

Quizplus · Accepted Answer

The initial project cost is typically well defined and can be estimated with a high level of accuracy. In contrast, the amount of cash inflow in any given year or the timing of the last cash inflow can be more uncertain and subject to variability. The risk of a pessimistic scenario occurring is also uncertain and difficult to quantify.

Closet Keeper Is Considering a New Project