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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 10%, and the inflation rate is 5%. Using the exact Fisher equation, calculate the NPV of project A. (Round to 2 decimals)
Year | Project A | Project B |
0 | -160,000 | -105,000 |
1 | 60,000 | 35,000 |
2 | 60,000 | 35,000 |
3 | 50,000 | 35,000 |
4 | 50,000 | 35,000 |
5 | 50,000 | 35,000 |
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