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Conceptual Connection: Inflation is expected to be 5 % per year for the next 5 years. The discount rate of 1 0 % is composed
Conceptual Connection: Inflation is expected to be per year for the next years. The discount rate of is composed of two elements: the real rate and the inflationary element. Since the discount rate has an inflationary component, the projected cash flows should also be adjusted to account for inflation. Make this adjustment, and recalculate the NPV Round present value calculations and your final answer to the nearest dollar.
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