Multiple choice

Directions: Choose the correct option for the given question: The inflation and deflation factors need not be taken into account while estimating future cash inflows since it is difficult to protect future price changes.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Inflation and deflation significantly impact the real value of future cash flows. Ignoring these factors leads to inaccurate project valuation and flawed investment decisions.

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