If a low cash flow this year makes a low cash flow next year more likely to occur, this means the project cash flows tend to be ____.
A)less predictable
B)independent of each other
C)more volatile
D)correlated

Question

Quizplus · Accepted Answer

If a low cash flow this year makes a low cash flow next year more likely to occur, it implies that the project cash flows are correlated. This is because the cash flows of one year are influenced by the cash flows in the previous year, indicating a relationship between the two. Therefore, D is the best answer.

If a Low Cash Flow This Year Makes a Low