If the Inflation Rate Was Positive the Expected NPV of an Investment

Multiple Choice

If the inflation rate was positive the expected NPV of an investment would be:

A) understated if real cash flows were discounted by the nominal discount rate.
B) understated if nominal cash flows were discounted by the nominal discount rate.
C) overstated if the real cash flows were discounted by the nominal discount rate.
D) understated if the nominal cash flows were discounted by the real discount rate.
E) overstated if the real cash flows are discounted by the real discount rate.