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Crude oil in nominal terms refers to its value in current prices without adjusting for inflation. Crude oil in real terms refers to its value in constant prices that have been adjusted for inflation, allowing for a more accurate comparison over time.

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1y ago

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Is Weighted average cost of capital real or nominal?

The Weighted Average Cost of Capital (WACC) can be expressed in either real or nominal terms, depending on the context. A nominal WACC includes the effects of inflation, while a real WACC adjusts for inflation to reflect the true cost of capital in purchasing power terms. The choice between the two typically depends on the cash flows being discounted; if they are nominal cash flows, nominal WACC is used, and for real cash flows, the real WACC is appropriate.


The process of dividing a nominal quantity by a price index in order to express the quantity in real terms is called?

Deflating!


What is nominal price and real price?

Real price is in a mud nominal price is in your FACE


Can TVM be used to evaluate the real return or just the nominal return?

TVM, or Time Value of Money can certainly be used to calculate a real return. The only difference between a nominal return and a real return is inflation, so simply discount your future cash flows by anticipated inflation and you have a real return. In simpler terms assuming inflation is steady you could simply deduct inflation from your nominal return. For example a nominal 7% return with 3% inflation could be desribed as a 4% real return.


Liabilities is real accounts or nominal accounts?

nominal account.


Is depreciation real or nominal account?

It is a real contra account. The nominal account associated with depreciation is depreciation expense.


Is accumulated depreciation real or nominal account?

It is a real contra account. The nominal account associated with depreciation is depreciation expense.


What does it mean if real GDP were growing faster then nominal GDP?

It means that inflation is negative, also known as deflation.


What is difference nominal cash flow and real cash flow?

Assuming we're using the cash-flows (Cf) and the required return rate (r) to calculate the Net Present Value (NPV), We need to follow the Rule of Consistency, which is to say, if our (r) is stated in real terms, we must use Real (Cf), and vice versa. Helpful formulas: To adjust Real (Cf) to Nominal, we compound it (n) periods, using the rate of inflation (inf), viz: (Cf-real) * (1+inf)^(n) Similarly, to adjust Nominal (Cf) to Real, we discount it viz: (Cf-nominal) / (1+inf)^(n) The Fisher Theorem illustrates the relation between real and nominal rates, viz: (1+r-nom) = (1+r-real) * (1+inf)


How do you calculate real income using nominal income?

Real income is calculated by adjusting nominal income for inflation to reflect the purchasing power of money. This is done using the formula: Real Income = Nominal Income / (1 + Inflation Rate). By dividing the nominal income by the inflation rate (expressed as a decimal), you can determine how much goods and services that income can actually buy in terms of constant dollars. This adjustment allows for a more accurate comparison of income over time.


Is inventory a nominal account?

real


Is suspense account a nominal account?

Not necessarily. It can be of any type. Real, Personal or Nominal.