A company is exploring a project with the following expected real cash flows. Year 01234 Cash Flow $500,000 $0 $300,000 $0 $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.