Errors in cash flows

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PROJECTED CASH FLOWS VERSUS ACTUAL CASH FLOWS

A somewhat subtle point needs to be made: one can project an expected cash flow of 15%, however, there could be a forecasting error in such estimate. Therefore, errors in cash flows or any other projection would mean that the risk assessment is flawed. Hence, budget analysts use sensitivity (what-ifs) analysis and scenario planning to assess future risk. Would you agree? If yes, explain.

Reference no: EM133060039

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