Assume That Sales Revenues Are Increasing More Rapidly Than Product

question 58

Multiple Choice

Assume that sales revenues are increasing more rapidly than product costs,but that a project's cash flows have been represented as an annuity when calculating NPV.Which of the following problems may occur?

• A) Nominal cash flows are possibly being discounted with a real rate.
• B) Real cash flows are possibly being discounted with a nominal rate.
• C) Nominal cash flows are possibly being discounted with a nominal rate.
• D) Real cash flows are possibly being discounted with a real rate.

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Definitions:

Adler

Alfred Adler, an Austrian medical doctor and psychotherapist known for his development of Individual Psychology, which emphasizes the importance of feelings of inferiority and the creative power of the individual to shape his or her life.

Defense Mechanism

Psychological strategies brought into play by the unconscious mind to manipulate, deny, or distort reality in order to defend against feelings of anxiety and unacceptable impulses.

Repression

is a psychological defense mechanism where distressing thoughts, memories, or feelings are unconsciously pushed out of conscious thought.

Psychoanalyst

A therapist who uses Freudian methods of talking therapy to uncover and interpret the unconscious motivations that influence behavior.