Question: The net present value method of analyzing potential capital projects seems straightforward. Specifically, to calculate net present value one subtracts the cost of the project

The net present value method of analyzing potential capital projects seems straightforward. Specifically, to calculate net present value one subtracts the cost of the project from the present value of the project's expected cash flow stream. In practice, net present value analysis is not all that easy to perform. What do you believe are some of the challenges that an analyst faces when he/she attempts to perform net present value analysis? Address the same question about the Internal Rate of Return (IRR).

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