When the Dollar Declines in Value Against a Foreign Currency

question 130

Multiple Choice

When the dollar declines in value against a foreign currency, it is called a(n) :

• A) appreciation.
• B) depreciation.
• C) inflation.
• D) deflation.

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Definitions:

Net Present Value

A financial metric used to evaluate the profitability of an investment, representing the difference between the present value of cash inflows and outflows over a period.

Capital Budgeting

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

Investments

Assets or items acquired with the goal of generating income or appreciation in value over time.

Net Present Value

A valuation method that calculates the present value of future cash flows generated by an investment, minus the initial investment cost.