Which Option Best Describes the Use of Real Cash Flows

question 26

Multiple Choice

Which option best describes the use of real cash flows?

• A) All future cash flows are expressed in the prices expected to rule when the cash flow occurs.
• B) Present cash flows are expressed in constant purchasing power.
• C) All present cash flows are expressed in the prices expected to rule when the cash flow occurs.
• D) Future cash flows are expressed in constant purchasing power.

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Definitions:

P(B)

The probability of occurrence of event B in a statistical experiment.

P(A And B)

The likelihood that events A and B will happen simultaneously.

Independent Events

Two or more events are independent if the occurrence of one does not affect the probability of the other(s).

P(A)

The probability of event A occurring in a given statistical experiment.