The possibility that errors in projected cash flows can lead to incorrect estimates of net present value is called _____ risk.
A) Forecasting.
B) Projection.
C) Scenario.
D) Monte Carlo.
E) Accounting.

Question

Quizplus · Accepted Answer

Forecasting risk refers to the uncertainty in financial projections, including cash flows, which can lead to inaccurate estimates of net present value (NPV). This risk arises from the difficulty in predicting future financial performance accurately.

The Possibility That Errors in Projected Cash Flows Can Lead