Question
Arya Co. is considering the following two independent projects. The cash flows for project A are expressed in nominal terms, while project B's are expressed
Arya Co. is considering the following two independent projects. The cash flows for project A are expressed in nominal terms, while project B's are expressed in real terms. The appropriate nominal discount rate is 12%, and the inflation rate is 6%. Using the exact Fisher equation,
| Year | Project A | Project B |
| 0 | -260,000 | -205,000 |
| 1 | 80,000 | 50,000 |
| 2 | 80,000 | 50,000 |
| 3 | 80,000 | 50,000 |
| 4 | 80,000 | 50,000 |
| 5 | 50,000 | 50,000 |
calculate the real discount rate. (Enter percentages as decimals and round to 4 decimals).
Using the exact Fisher equation, calculate the NPV of project A. (Round to 2 decimals)
Using the exact Fisher equation, calculate the NPV for project B. (Round to 2 decimals)
Arya Co. is considering the following two independent projects. The cash flows for project A are expressed in nominal terms, while project B's are expressed in real terms. The appropriate nominal discount rate is 10%, and the inflation rate is 5%. Based on the information provided, the firm should:
| Year | Project A | Project B |
| 0 | -260,000 | -205,000 |
| 1 | 80,000 | 50,000 |
| 2 | 80,000 | 50,000 |
| 3 | 80,000 | 50,000 |
| 4 | 80,000 | 50,000 |
| 5 | 50,000 | 50,000 |
| reject both | ||
| accept A, reject B | ||
| reject A, accept B | ||
| accept both |
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Currency Wars Offense And Defense Through Systemic Thinking
Authors: Jeffrey Yi-Lin Forrest , Yirong Ying , Zaiwu Gong
1st Edition
3319677640,3319677659
