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An investment project has the following cash flow: Co-$80,000 C1-$60,000|2=$50,000||3=$50,000|4=$50,000||5-$50,000|16=$50,000 1 2 4 C: Cost, I: Income Consider escalation rate of 8% for the costs,
An investment project has the following cash flow: Co-$80,000 C1-$60,000|2=$50,000||3=$50,000|4=$50,000||5-$50,000|16=$50,000 1 2 4 C: Cost, I: Income Consider escalation rate of 8% for the costs, escalation rate of 12% for incomes and inflation rate of 6% 1) Calculate the ROR for escalated dollar and constant dollar cash flow of this investment project. 2) Calculate NPV for escalated dollar and constant dollar cash flow considering 12% escalated dollar minimum rate of return. Note: To calculate the constant dollar NPV, first you need to calculate constant dollar minimum rate of return. Please, explain your work in detail including all the required equations and calculations
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