Please Help ASAP

1) Consider the following statements about the accounting for inflation in a capital budgeting analysis:

1. An analyst can use nominal dollars in conjunction with a nominal interest rate.
2. An analyst can use real dollars in conjunction with a real interest rate.
3. An analyst can use nominal dollars in conjunction with a real interest rate.

Which of the above statements is (are) correct?

Multiple Choice

• I only.

• II only.

• III only.

• I and II.

• II and III.

2) Amanda Corporation has a 30% income tax rate. Amanda is considering a capital project that will produce average revenue of $460,000, average operating expenses (excluding depreciation) of $385,000 and average depreciation of $35,000 for 6 years. If the after-tax accounting rate of return is 13.33%, Amandas investment in the capital project is:

Multiple Choice

• $210,053.

• $562,640.

• $315,079.

• $168,792.

• Cannot be determined from the information provided.