(Appendix 12A)If Nominal Cash Flow Is Calculated as Real Cash

question 10

Multiple Choice

(Appendix 12A) If nominal cash flow is calculated as real cash flow × (1 + i) ^t in an NPV analysis, i denotes the:

• A)Weighted average cost of capital
• B)Risk-free interest rate
• C)Discount rate
• D)Rate of inflation

---

Definitions:

Informational Influence

The change in opinions or behavior that occurs when an individual conforms to what they believe to be the correct response in a specific context, often based on the information provided by others.

Ambiguous Situations

Scenarios or events that lack clear context or guidelines, leading to uncertainty in perception or decision-making.

Pluralistic Ignorance

A psychological state where individuals wrongly believe their thoughts, feelings, or behaviors are different from those of the majority, often leading to conformity with perceived norms.

Informational Influence

This occurs when an individual conforms to a group's behavior under the assumption that the group possesses more accurate information.