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A project is expected to have the net cash flows shown. The values are in future dollars, which have been inflated by 6% per year.

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A project is expected to have the net cash flows shown. The values are in future dollars, which have been inflated by 6% per year. Because the project owner is unsure how the present worth is calculated, he asked you to do it in two ways over the 4-year planning horizon: (1) Deflation method) Adjusted-discount method You said both ways will provide the same answer, but he asked you to show him the calculations using the company's market rate of 13% per your Tear 2 -8,973 2,000 5.000 5,000 5,000 a) Determine the present worth using method 1 (3 points) b) Determine the present worth using method 2 (4 points)

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