With Increasing Inflation, Borrowing Becomes

question 99

Multiple Choice

With increasing inflation, borrowing becomes:

• A) more attractive because repayment can be made with cheaper money.
• B) less attractive because repayment is made with dearer money.
• C) impossible because money has lost its value.
• D) a mute issue because of liquidity issues.

---

Definitions:

Individual Cash Flows

The specific instances of cash being received or expended by an entity, which can include income from sales, financing, investments, or operational activities.

Subjectively

Based on personal feelings, tastes, or opinions rather than external facts or evidence.

Capital Budgeting

The process of evaluating and selecting long-term investments that are in alignment with the goal of shareholder wealth maximization.

Standard Deviation

A statistical measure that quantifies the amount of variation or dispersion of a set of data values, often used to assess risk in investment portfolios.