If the Price Index for a Particular Year Is 110

question 21

Multiple Choice

If the price index for a particular year is 110, it implies that ________.

• A) prices have increased by 11% over the base year
• B) prices have increased by 10% over the base year
• C) prices have increased by 1.1% over the base year
• D) prices have increased by 0.10% over the base year

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The rate of interest applied to calculate the current value of future cash flows within discounted cash flow evaluation.

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