The Real Approach to Incorporating Inflation into the Net Present

Multiple Choice

The real approach to incorporating inflation into the net present value method predicts ________.

A) cash inflows and outflows in real monetary units and uses a real rate as the required rate of return
B) cash inflows and outflows in real monetary units and uses a nominal rate as the required rate of return
C) cash inflows and outflows in nominal monetary units and uses a real rate as the required rate of return
D) cash inflows and outflows in monetary units that are adjusted for inflation and uses a real rate as the required rate of return