A Cash Flow Received in Two Years Is Expected to Be

question 59

Multiple Choice

A cash flow received in two years is expected to be $10,816 in nominal terms. If the real rate of interest is 2% and the inflation rate is 4%, what is the real cash flow for year-2?

• A) $11,236
• B) $10,816
• C) $10,000
• D) $9,246

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Definitions:

Experience

Direct observation of or participation in events as a basis of knowledge, or the practical contact with and observation of facts or events.

Scientific Method

A systematic process for gathering and testing information used in science to explore observations and answer questions.

Subjectivity

The characteristic of relying on or being affected by one's own emotions, preferences, or views instead of objective realities.

Study Schedule

A study schedule is a planned allocation of study times and subjects, designed to enhance learning efficiency and academic performance.