The real and nominal methods are most closely associated with:
A) Internal rate of return
B) Payback
C) Net present value
D) Cost of capital

Question

Quizplus · Accepted Answer

The real and nominal methods are primarily used in determining the net present value (NPV) of an investment. Both methods involve adjusting cash flows for inflation, with the real method using constant dollars and the nominal method using actual dollars. NPV is a common tool in capital budgeting for evaluating the profitability of a proposed investment.

The Real and Nominal Methods Are Most Closely Associated With