A Project Will Generate a Real Cash Flow Three Years

question 97

Multiple Choice

A project will generate a real cash flow three years from now of $100,000.If the nominal discount rate is 10% and expected inflation is 3%,what is the nominal cash flow for year 3?

• A) $112,551
• B) $106,090
• C) $109,273
• D) $122,504

---

Definitions:

Inventory

A complete list of items such as property, goods in stock, or the contents of a building.

Product Costs

Costs that are directly associated with the production of goods, including direct materials, direct labor, and manufacturing overhead.

Administrative Support

Operational support activities provided to help maintain the daily functioning of an organization or office.

Total Quality Management

A comprehensive approach to long-term success through customer satisfaction, focusing on continuous improvement in all organizational processes.