Answer (B) is correct. Forecasting cash flows has the most risk in the capital budgeting process. The economic benefit or cost must be estimated period by period. In addition, the economic life, depreciable life, and salvage value of the asset must be estimated. All of these estimates help forecast the cash flows for the project. Because this step requires the most use of estimates, it is said to be the riskiest in the capital budgeting process.