Intro

In real terms, a project will generate the following cash flows in years $0$ through $2$ :

$(-14,9,10).$ The nominal discount rate is $14\%$ per year, and the inflation rate is $7\%$ per year. Use both real

and nominal discounting to find the NPV$.$

Part $1$

What is the real discount rate in decimal $($not percentage$)$ form, correct to seven digits after the decimal?

Correct $\sqrt[\phantom{2}]{?}$

The real discount rate is $\frac{1\mathrm{.}14}{1\mathrm{.}07}-1=0\mathrm{.}0654206.$

Part $2$

What is the nominal cash flow two years from now?

Part $3$

What is the NPV to six digits after the decimal?