Forecasting Risk Emphasizes the Point That the Soundness of Any

question 277

Multiple Choice

Forecasting risk emphasizes the point that the soundness of any management decision based on the net present value of a proposed project is highly dependent upon the:

• A) Accuracy of the cash flow projections used in the analysis.
• B) The time frame in which the project is implemented.
• C) Amount of the net present value in relation to the length of the project's life.
• D) Level of capital spending in relation to the dollar amount of the net present value.
• E) Frequency and duration of the project's cash flows.

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