A capital budgeting project's cash flows, including the total up-front cost of the project, are typically known with certainty before the project starts.

Question

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While cash flows can be forecasted, there is always some degree of uncertainty in any project, and unexpected costs or changes in market conditions can impact the actual cash flows. Additionally, the up-front cost of a project may also be subject to some degree of uncertainty or change as the project progresses.

A Capital Budgeting Project's Cash Flows, Including the Total Up-Front