Which one of the following can cause significant errors in the calculation of free cash flows associated with a project?

Question

Quizplus · Accepted Answer

Transfer prices refer to the prices at which goods or services are transferred between different divisions or departments within a company. If these prices are not based on market prices, they can either overstate or understate the actual production costs, ultimately leading to inaccurate calculation of project free cash flows. The other options listed (export licenses, opportunity costs, and market prices) do not directly affect the calculation of free cash flows.

Which One of the Following Can Cause Significant Errors in the Calculation