An investment project has the following cash flow:

Consider escalation rate of 10% for the costs, escalation rate of 12% for incomes and inflation rate of 8% where C = cost & I = income.

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.

Include all the required equations and calculations.

COF$80,000 C1= $60,000 12:550,000 13$50,000 14= $50,000 15-$50,000 16= $50,000 4 6