ACCA每日一小考28期题目加解析

      ACCA每日考场28期The management accountant at Jackman Co has been asked to produce a DCF appraisal of a new product line. The nominal WACC is 15%, inflation is 5% and all revenues and costs are expected to increase in line with inflation.
Which of the following is the preferred approach?
Make no adjustment to the annual cash flows and discount at 15%.B. Compute the expected revenues and costs for each year taking inflation into account, and then discount the cash flows at 15%.C. Make no adjustment to the annual cash flows and discount at 20.75%.D. Compute the expected revenues and costs for each year taking inflation into account, and then discount the cash flows at 20.75%.

正确答案：B

答案解析：
The correct answer is: Compute the expected revenues and costs for each year taking inflation into account, and then discount the cash flows at 15%.

The nominal WACC includes inflation. Therefore costs and revenues should be inflated appropriately before the nominal WACC is applied. The WACC is the Weighted Average Cost of Capital. That is, the company's overall cost of capital taking into account the cost of all equity and debt finance.