Answered: Do we use the term risk to describe an…

Do we use the term risk to describe an investment project where cash flows are not known in advance with certainty? Explain how?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter8: Securities Law Considerations When Obtaining Venture Financing

Section8.4: Registration Of Securities Under The Securities Act Of 1933

Problem 1CC

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Do we use the term risk to describe an investment project where cash flows are not known in advance with certainty? Explain how?

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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