Inflation and NPV

a) Hewlett Packard is considering an investment project that requires an initial investment of $50 million. The investment will generate $15 million at the end of each year for 4 years if there is no inflation. A financial analyst determines that the project will have a nominal discount rate of %15. The analyst also forecasts an inflation rate 7%. What is the real rate?

b) Hewlett Packard is considering an investment project that requires an initial investment of $50 million. The investment will generate $15 million at the end of each year for 4 years if there is no inflation. A financial analyst determines that the project will have a nominal discount rate of 15%. The analyst also forecasts an inflation rate 7%. What is the net present value of the investment project?