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papahomer papahomer
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7 years ago
Greenspan Inc. discounts cash flows at a nominal rate of 10%. Inflation over the next few years is expected to average 3%. Which of the following would be a correct adjustment for inflation when computing net present value?
A) Discount cash flows at 10%; increase revenues and expenses by 3% each year.
B) Discount cash flows at 13%; increase revenues and expenses by 3% each year.
C) Discount cash flows at 7%; ignore inflation when forecasting revenues and expenses.
D) Either A or C would be acceptable.
Textbook 
Financial Management: Principles and Applications

Financial Management: Principles and Applications


Edition: 13th
Authors:
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LutionalLutional
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papahomer Author
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7 years ago
Correct Slight Smile TY
choih94
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Yesterday
Thank you, thank you, thank you!
emilyas19
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2 hours ago
You make an excellent tutor!
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