What is the major problem in using this approach to handle risk in capital budgeting?

The major problem in using a single approach to handle risk in capital budgeting is that it often oversimplifies complex uncertainties and fails to capture the full spectrum of outcomes. This can lead to misinformed decision-making as it may not adequately account for variability in cash flows, market conditions, or project-specific risks. Additionally, relying on one method can ignore qualitative factors and the interdependence of various risks, potentially resulting in unrealistic projections and financial losses.