Foreign investment appraisal - Nominal dollar

KKenny3y ago

Hi John, When the question ask us to appraise using "nominal dollar projection" for a foreign investment appraisal, do we have to, or not to, take into consideration of inflation, i.e. for the annual increase in revenue or variable costs etc.? What does this keyword "nominal" asking us to do (or be aware of) in the question? I came across few questions in which they asked for the same thing but the results are conflicting with each other, or I may have misunderstood. For example, Kaplan exam kit (Blipton International, Dec 08 adapted) vs. Technical article: International project appraisal accaglobal. Many thanks! Best regards, Kenny

John MoffatTutor3y ago#1

Nominal cash flows are actual cash flows i.e. taking inflation into account (as opposed to 'real' cash flows, which are the cash flows ignoring inflation). Have you investigated using a VPN to be able to access our lectures, because this is all explained in our lectures?

KKenny3y ago#2

Hi John, Yes, I did, watched the three lectures on cost of capital already. John, need help on a quick one - exchange rate sometimes given in two rates (i.e. $/£ 1.500 - 1.510), what do they mean? buy/sell, or are they a range? Many thanks! Best regards, Kenny

John MoffatTutor3y ago#3

They are the buy and sell rates. I explain them at the start of my lectures on foreign exchange risk management.

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