[amp_mcq option1=”Present Value” option2=”Real Cash flow” option3=”Real Cash flow + Present Value” option4=”Real Cash flow – Present Value” correct=”option2″]<\/p>\n
The correct answer is: B. Real Cash flow<\/strong><\/p>\n Money cash flow is the amount of money that is actually received or paid out in a given period of time. Real cash flow is the money cash flow adjusted for inflation. If there is no inflation during a period, then the money cash flow and the real cash flow will be equal.<\/p>\n Option A, present value, is the value of a future sum of money in today’s dollars. It is calculated by discounting the future sum of money by a discount rate. The discount rate is a measure of the risk of the future sum of money not being received. If there is no inflation, then the discount rate will be zero and the present value will be equal to the future sum of money.<\/p>\n Option C, real cash flow + present value, is the sum of the real cash flow and the present value. This is the total amount of money that is received or paid out in a given period of time, adjusted for inflation.<\/p>\n Option D, real cash flow – present value, is the difference between the real cash flow and the present value. This is the amount of money that is actually received or paid out in a given period of time, after adjusting for inflation.<\/p>\n","protected":false},"excerpt":{"rendered":" [amp_mcq option1=”Present Value” option2=”Real Cash flow” option3=”Real Cash flow + Present Value” option4=”Real Cash flow – Present Value” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-55293","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n