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Please show work Mr. Art Deco will be paid $170,000 one year hence. This is a nominal flow, which he discounts at an 10% nominal
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Mr. Art Deco will be paid $170,000 one year hence. This is a nominal flow, which he discounts at an 10% nominal discount rate: PV = $170,000 / 1.10 = $154,545 The inflation rate is 2%. Calculate the PV of Mr. Deco's payment using the equivalent real cash flow and real discount rate. (Do not round intermediate calculations. Round your "Real cash flow" and "Present value" answers to the nearest whole dollar amount. Enter the "Real discount rate" as a percent rounded to 3 decimal places.) Answer is complete but not entirely correct. Real cash flow Real discount rate $ 170,000 X 8.000 X % $ 2,168,367 Present valueStep by Step Solution
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