For a startup business, the application of the NPV and IRR techniques relies heavily on projected cash flows which can be uncertain. If the source of funding is from internal savings, then the cost of capital would be based on the opportunity cost of such funds. Startup businesses usually face a lot of challenges in the initial stages of existence and face a high risk of loss. Over time and with the advantage of the learning curve, the hiccups may be overcome, and the company may progress towards higher levels of production and profitability associated with a lower risk.

Since the computation of the net present value is based on the same level of risk throughout the project's entire duration, does it invalidate the process? Discuss why or why not?