Which One of the Following Is Most Likely the Reason

question 9

Multiple Choice

Which one of the following is most likely the reason why many projects fail to earn their projected rates of return?

• A) Rapidly rising inflation
• B) Delays in obtaining contracts and permits
• C) Lack of raw materials
• D)Forecasting bias by the sponsoring manager

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Definitions:

Principal

An individual or entity that authorizes an agent to act on their behalf in legal or financial matters.

NPV Criterion

A financial metric used to assess the profitability of an investment, calculating the net present value of all cash flows associated with it.

Future Cash Flows

Estimates of the amount of money expected to be received or paid out in the future through investment, business operations, or other financial activities.

Investment

The act of allocating resources, typically money, with the expectation of generating an income or profit.