If Tonya as a Municipal Engineer Evaluates a Project Which

Multiple Choice

If Tonya as a municipal engineer evaluates a project which is subject to the effect of inflation, she should

A) work with nominal values for cash flows and nominal interest rates.
B) work with real values for cash flows and nominal interest rates.
C) work with nominal values for cash flows and real interest rates.
D) work with constant values for cash flows and current interest rates.
E) rely on forecast of future interest rates and cash flows in real or nominal terms.