Multiple Choice
Suppose the firm's required rate of return is stated in nominal terms, but the project's expected cash flows are expressed in real rands.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.
Correct Answer:
Verified
Correct Answer:
Verified
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