7. A farm can invest $230,000 which is contracted to generate nominal annual cash flows of $69,000 for five years (each coming at the end of Year 1 through Year 5). The expected inflation rate is 6% while the discount rate net of inflation is 9%. a. Calculate the real net cash flows (3 points) b. Calculate the NPV of the investment, using both the exact and the simplified methods to determine the nominal discount rate. (7 points) c. Should the company invest? Briefly explain and justify. (3 points)