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2. (2 points) A company is exploring a project with the following expected real cash flows. Year 1 2 3 Cash Flow $500,000 SO $300,000
2. (2 points) A company is exploring a project with the following expected real cash flows. Year 1 2 3 Cash Flow $500,000 SO $300,000 SO $600,000 Inflation over the life of the project is expected to be 3.5% per year. The company believes that a nominal discount rate of 15.92% is appropriate given the risk of the project. a) Determine the nominal cash flows of the project. b) Determine the NPV of the project using real values
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