If the inflation rate is 6%, find the overall(nominal) and real rates of return for the investment shown(see table). Depreciation is straight line over five years with salvage equal to zero. A tax rate of 39% applies. After the overall rate of return is found, use the equational relationship between overall and real rate of return to find the latter.

(please find overall rate of return and use their mathematical relationship that to find the real rate of return)

If the inflation rate is 6%, find the overall and real rates of return for the investment shown (see table). Depreciation is straight line over five years, with salvage equal to ZERO .A tax rate of 39% applies. After the overall rate of return is found, use the equational relationship between overall and real rate of return to find the latter. Year Actual Cash Flow 0 2 3 $-1000 300 350 400 450 500 4 5