Capital budgeting decisions are risky because all of the following are true except:

A) The outcome is uncertain.
B) Large amounts of money are usually involved.
C) The investment involves a long-term commitment.
D) The decision could be difficult or impossible to reverse.
E) They rarely produce net cash flows.

Capital budgeting decisions are risky because of the uncertainty and the large amounts of money involved, as well as the long-term commitment and the difficulty or impossibility of reversing the decision. However, capital budgeting decisions are intended to produce net cash flows, so the statement "they rarely produce net cash flows" is not true and therefore not a reason why these decisions are considered risky.