Suppose the Firm's WACC Is Stated in Nominal Terms, but the Project's

Multiple Choice

Suppose the firm's WACC is stated in nominal terms, but the project's expected cash flows are expressed in real dollars. In this situation, other things held constant, the calculated NPV would

A) Be correct.
B) Be biased downward.
C) Be biased upward.
D) Possibly have a bias, but it could be upward or downward.
E) More information is needed; otherwise, we can make no reasonable statement.