The nominal approach is easier to understand and apply because it uses nominal cash flows from accounting systems and nominal rates of return from financial markets.

Question

Quizplus · Accepted Answer

The nominal approach is based on nominal cash flows and nominal rates of return, which are easier to obtain and understand from accounting and financial markets. This approach does not adjust for inflation, but it is simpler to apply in many situations.

The Nominal Approach Is Easier to Understand and Apply Because