If You Use Futures Prices to Estimate the Cash Flows

question 67

Multiple Choice

If you use futures prices to estimate the cash flows of a project, which discount rate should you use?
I.the cost of capital for the firm;
II.the cost of capital for the project;
III.the risk-free rate

• A)I only
• B)I and II only
• C)III only
• D)II only

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Definitions:

Two-Career Families

Households in which both partners are pursuing their careers, often leading to unique challenges and dynamics in work-life balance.

Supply And Demand

Fundamental economic concepts that determine the price of goods and services, where supply represents how much the market can offer, and demand indicates how much is wanted.

Volatile

Characterized by rapid and unpredictable changes, often seen in financial markets, prices, or demand patterns.

Supply Chain Companies

Businesses involved in the movement of goods from manufacturers to consumers, including production, distribution, and fulfillment services.