Why Is It Fairly Easy to Fall into the Trap

question 107

Multiple Choice

Why is it fairly easy to fall into the trap of discounting real cash flows with nominal rates?

• A)it is difficult to determine real discount rates.
• B)increases in nominal cash flows are often not forecast.
• C)inflation does not impact cash flows, but it does impact discount rates.
• D)increases in revenues are offset by increases in costs.

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Definitions:

Salesperson

An individual who sells products or services to customers, often directly, in order to generate revenue for a business or company.

Benefits

Advantages or positive outcomes that result from the use of a product or service, often used as selling points in marketing.

Emotional Dissonance

A state of conflict between publicly displayed emotions and internal feelings, often experienced by employees in service roles.

Nissan Maxima

A model of car manufactured by Nissan, known for its combination of performance, luxury, and comfort.