CERTYNEX IFRS ACADEMY

For a cold storage warehouse, Isembre projects its cash flows by applying annual general inflation of 2% to prices and costs. It discounts them at a real pre-tax rate of 6%, provided by a valuer. Which of the following findings identifies the error?

The error is applying inflation to costs: only selling prices may be indexed.

Nominal cash flows, including 2% general inflation, are discounted at a real rate.

The error is using a pre-tax rate.

There is no error, since the real rate is provided by an external valuer.