1. Which of the following is a reason why risk analysis is an important part of
ID: 2756205 • Letter: 1
Question
1. Which of the following is a reason why risk analysis is an important part of capital budgeting?
The people who propose projects have no vested interest in whether or not they are accepted.
Marketing managers are rarely excessively optimistic.
Project cash flows can be highly uncertain.
Financial analysts are rarely excessively pessimistic.
The people who propose projects have no vested interest in whether or not they are accepted.
Marketing managers are rarely excessively optimistic.
Project cash flows can be highly uncertain.
Financial analysts are rarely excessively pessimistic.
Explanation / Answer
correct option is "C" -Project cash flows can be highly uncertain.
The cash flow generated from project is not certain and they are only estimated .
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