Which one of the following would be more apt to make an unacceptable project appear acceptable?
A) Discounting real cash flows with real rates
B) Discounting nominal cash flows with real rates
C) Discounting real cash flows with nominal rates
D) Discounting nominal cash flows with nominal rates

Question

Quizplus · Accepted Answer

Discounting nominal cash flows with real rates would understate the discount rate, making the project appear more attractive than it actually is, as it would inflate the present value of future cash flows.

Which One of the Following Would Be More Apt to Make