The possibility that errors in projected cash flows can lead to incorrect estimates of net present value is called _____ risk.

A) Forecasting.
B) Projection.
C) Scenario.
D) Monte Carlo.
E) Accounting.

Forecasting Risk

The risk associated with making predictions about future events, which may not turn out as expected, potentially affecting financial projections and decisions.

Cash Flows

The movement of money into and out of a business or project, considered as a measure of its financial health.