If Unexpected Inflation Is Good for Borrowers,unexpected Deflation Is Good

question 48

Multiple Choice

If unexpected inflation is good for borrowers,unexpected deflation is good for

• A) borrowers, too.
• B) lenders.
• C) businesses.
• D) governments.

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows, given a specific rate of return.

Cash Inflows

Money received by a business, typically from sales, investments, financing, and other business activities.

Project Profitability Index

A financial metric used to determine the relative profitability of a project, calculated by dividing the present value of future expected cash flows by the initial investment.

Present Value

The present value of a future amount of money or series of cash inflows, considering a particular rate of interest.