The NPV Value Obtained by Discounting Nominal Cash Flows Using

question 60

Multiple Choice

The NPV value obtained by discounting nominal cash flows using the nominal discount rate is the:
I. same as the NPV value obtained by discounting real cash flows using the real discount rate II) same as the NPV value obtained by discounting real cash flows using the nominal discount rate
III. same as the NPV value obtained by discounting nominal cash flows using the real discount rate

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

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Definitions:

Duress

A situation in which someone performs an act as a result of violence, threat, or other pressure against the person.

Fraud

The intentional deception or misrepresentation made by one party to gain an unfair advantage or harm another party.

Innocently Misrepresented

A situation where a false statement is made without knowledge of its falseness, usually without intent to deceive, but leading another to enter into a contract.

Full-blooded Pomeranian

A dog that is purely of the Pomeranian breed, without any mixed lineage.