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LOS a: Describe how inflation affects the estimation of cash flows for a company domiciled in an emerging market.
Q1. In order to properly measure the cash flows of an emerging market company to consider the impact of inflation, one starts the process by constructing the:
A) historical and forecasted financial statements in both nominal and real terms.
B) historical financial statements using the temporal method.
C) forecasted financial statements using the current method.
Q2. With respect to emerging market companies, which of the following macroeconomic variables has the most impact on the estimation of cash flows?
A) Inflation.
B) Country risk.
C) Political risk.
Q3. When valuing an emerging market company using cash flows expressed in both nominal and real terms:
A) both valuations are not reliable.
B) each valuation differs by the inflation differential.
C) both valuations are identical. | 
发表于 2009-3-6 14:43
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