Which pattern of cash flow stream is the most difficult to use when evaluating projects?
A) Mixed stream.
B) Conventional flow.
C) Nonconventional flow.
D) Annuity.

Question

Quizplus · Accepted Answer

Nonconventional cash flow streams are the most difficult to use when evaluating projects because they involve multiple changes in the direction of cash flows, such as initial investments followed by several years of income, and then a large outflow at the end of the project's life. This makes it challenging to calculate metrics such as net present value (NPV) and internal rate of return (IRR), which rely on consistent cash flows over time. As a result, nonconventional cash flow streams require more complex analysis and may be harder to interpret accurately.

Which Pattern of Cash Flow Stream Is the Most Difficult