A new project under consideration is expected to have the following nominal cash flows of $11000, $12000, $13000, $14000, $15000 in years 1 through 5. The companys nominal cost of capital is 11%. The expected inflation rate is 3.5%.

(a) Estimate the companys real cost of capital.

(b) Estimate the real cash flows on this project.

(c) Estimate the total present value, based on real cash flows and the real discount rate.