project to be _________ 15,250, 15100, 15557, 15403

year of the project to be _________ 6262, 6452,6388, 6325

7. Inflation in project analysis It is often easy to overlook the impadt of inflation on the net present value of the projedt. Not incorporating the impact of infilation in determining the value of the cash flows of the project can result in erroneous estimations. Consider the following scenario: Globex Corp. is considering apening a new division to produce units that it expects to sell at a price of $14,950 each in the first year of the project. The company expects the cost of producing each unit to be $6,200 in the first year; however, it expects the selling price and cost per unit to increase by 1% each year. Based on the preceding information, the company expects the selling price in the fourth year of the project to be and it expects the cost per unit in the fourth year of the project to be which of the following statements about inflation's effect on net present value (NP) is correct? O When the selling price and cost per unit are expected to increase at the same rate, you do nat need to take inflation into account when performing a capital budgeting analysis. when the selling price and oost per unit are expected to increase at the same rate, forgetting to take inflation into account in a capital bgeting analysis will typicaly cause the estimated NPV to be lower than the true 0 NPV