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:

Creditor

An entity or person to whom money is owed by a debtor or borrower.

Efficient Manager

An individual who is effective at organizing resources and processes to achieve specific goals with minimum waste.

Partnership Funds

Resources or capital contributed by partners to a partnership for the purpose of its business.

Pro Rata Basis

A method of allocating amounts or resources proportionally, according to a specific rate, percentage, or share.