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1. The following table summarizes the expected cash flows in nominal terms on a new project for Pfizer: Year 0 1 2 3 4 5
1. The following table summarizes the expected cash flows in nominal terms on a new project for Pfizer: Year 0 1 2 3 4 5 Expected Cash Flows (millions) $140 115 125 136 144 185 The firm's nominal cost of capital is 10%. The expected inflation rate is 2.5% a. Estimate Pfizer's real cost of capital b. Estimate the real cash flows on this project c. Estimate the net present value, based on real cash flows and real discount rate
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