A financial decision should be pursued when A. the net present value is negative. B. the...
A financial decision should be pursued when
A.
the net present value is negative.
B.
the net present value is positive.
C.
the interest rate falls.
D.
the interest rate rises.
The nominal interest rate approximately equals which of the following?
A.
the real interest rate minus the inflation rate
B.
the real interest rate plus the growth rate of real GDP
C.
the real interest rate minus the growth rate of real GDP
D.
the real interest rate plus the inflation rate
Homework Answers
Q1
Answer
Option B.
The net present value is positive.
A financial decision is in favor of the decision when the decision
has a present positive value of the given project or asset then
that is pursued.
---------
Q2
ANswer
Option D
It is a sum of real interest rate and inflation.
Nominal interest rate =real interest rate + inflation
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