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When One Incorporates Inflation into a Present Value Calculation, Which

Question 3

Multiple Choice

When one incorporates inflation into a present value calculation, which of the following is the most correct?


A) the inflation-corrected discount rate should be equal to the nominal interest rate minus the inflation rate
B) if the net benefits are not corrected for inflation, the discount rate shouldn't be either
C) the discount rate should be equal to the nominal interest rate plus the inflation rate
D) all of the above
E) a and b only

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