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1. Which of the following statements is CORRECT? In investment projects valuation: a. Using nominal cash flows accounting for inflation one should discount cash flows
1. Which of the following statements is CORRECT? In investment projects valuation: a. Using nominal cash flows accounting for inflation one should discount cash flows at the discount rate, that is reduced by inflation rate. b. Since depreciation is not a cash expense, it should have no impact on the size of cash flows in capital budgeting decisions. c. Opportunity costs are taken into account, when different sources of financing are used. It is about the cost of money for the project. d. Negative operating income could take place during some periods of the project's life, but it could have no negative effect on the project's cash flow for these periods. e. None of the above. 2. Is it true? NOPAT is a measure of profitability that is calculated as an operating profit minus other income and expenses including interest payments and interest income. Explain your rationale
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