When Making Capital-Budgeting Decisions, the Effects of Inflation

Multiple Choice

When making capital-budgeting decisions, the effects of inflation

A) should be ignored since it is impossible to know what future inflation rates will be.
B) are important, but it is impossible to estimate their effects on capital-budgeting decisions.
C) act to reduce the minimum desired rate of return on projects.
D) act to increase the minimum desired rate of return on projects.