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1. Do you agree or disagree with the following statement given the techniques discussed in this...

1. Do you agree or disagree with the following statement given the techniques discussed in this chapter? We can calculate future cash flows precisely and obtain an exact value for the NPV of an investment.

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Answer :-

No, we cannot calculate future cash flows precisely, it will be just an estimation based on past activities and adjusting the changes that is to be made. Actual cash flow may differ based on actual situation. There are many uncertainity which can not be determined and happens only on actual basis. The effect of which we cannot take in future cash flow, so it will not come precisely.

And also if future cash flows can not be estimated precisely then subsequently NPV will not be exact. As NPV is purely based on future cash flows.

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