Nominal cash flows are expressed in terms of their purchasing power in a base year.

Name: Nominal cash flows are expressed in terms of their purchasing power in a base year.
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Question

Quizplus · Accepted Answer

Nominal cash flows are expressed in actual dollars received or paid at a specific point in time, without accounting for inflation or changes in purchasing power. It is real cash flows that are adjusted for inflation to reflect their purchasing power in a base year.

Nominal Cash Flows Are Expressed in Terms of Their Purchasing