Question

A potential problem with DCF analysis is that a project may appear to have a positive NPV because the estimated cash flows are Blank______.

Multiple choice question.

inaccurate


targeted


precise


correct

Answer 1

The best answer for the blank in your question is **inaccurate**.

So the complete statement would be: "A potential problem with DCF analysis is that a project may appear to have a positive NPV because the estimated cash flows are **inaccurate**."

This means that if the cash flow projections are not accurate, the resulting NPV may give a misleading indication of the project's viability.