A) accelerated
B) equal
C) different
D) inflated
✅ ANSWER: B
Real rate expected cash flows and nominal rate expected cash flows must be equal. Nominal cash flow is the true dollar amount of future revenues the company expects to receive and expenses it expects to pay out, without any adjustments for inflation. In the short term and under conditions of low inflation, the amounts attributed to nominal and real cash flows are nearly identical.
Real rate expected cash flows and nominal rate expected cash flows must be equal. Nominal cash flow is the true dollar amount of future revenues the company expects to receive and expenses it expects to pay out, without any adjustments for inflation. In the short term and under conditions of low inflation, the amounts attributed to nominal and real cash flows are nearly identical.