Explain Why in Practice the Cash Flows Associated with a Project

question 28

Essay

Explain why in practice the cash flows associated with a project are not certain cash flows.

---

Definitions:

Management Fee

A charge paid to investment managers for their services, typically a percentage of the assets under management.

Assets

Economic resources owned or controlled by an individual or entity, capable of producing value.

NAV

Net Asset Value, the total value of a fund's assets minus its liabilities, usually expressed per share.

Tail Event

An event or outcome that has a small probability of happening but can lead to significant impacts, often referred to in the context of financial risks.