1) If risk is reflected in a cash flow forecast by using different discount rates, for different line items or for different years in the forecast: ) it would involve less subjectivity than alternative approaches a ) it would be possible to mix real and nominal rates in a spreadsheet to match different line items forecast in constant and current dollars b it is possible that the ability to better tailor discount rates to particular characteristics of different situations would reduce comparability of investments or projects
1) If risk is reflected in a cash flow forecast by using different discount rates, for different line items or for different years in the forecast: ) it would involve less subjectivity than alternative approaches a ) it would be possible to mix real and nominal rates in a spreadsheet to match different line items forecast in constant and current dollars b it is possible that the ability to better tailor discount rates to particular characteristics of different situations would reduce comparability of investments or projects
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
All multiple choices.
Transcribed Image Text:2) You have information about concentrate production for a facility with a mine and a
mill, and about the price of the valuable metal contained in concentrate. Which of
the following choices contains only items that you need to reflectin a calculation of
net smelter return (NSR):
a
deduction from concentrate grade, losses in mill stockpile, by-product credits
b
shipping rates, smelter penalties, TC/RCs
TC/RCs, freight insurance, mill recovery
Transcribed Image Text:1) If risk is reflected in a cash flow forecast by using different discount rates, for
different line items or for different years in the forecast:
a
it would involve less subjectivity than alternative approaches
b O it would be possible to mix real and nominal rates in a spreadsheet to match
different line items forecast in constant and current dollars
it is possible that the ability to better tailor discount rates to particular
characteristics of different situations would reduce comparability of investments
or projects
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